Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

ASHRIDGE (BONAR LAW MEMORIAL) TRUST BILL

Read a Second time and committed.

BRITISH RAILWAYS BILL

COMMONS REGISTRATION (GLAMORGAN) BILL

GINNS AND GUTTERIDGE, LEICESTER (CREMATORIUM) BILL

Orders for Second Reading read.

To be read a Second time upon Thursday.

LONDON DOCKLANDS RAILWAY BILL

MILFORD HAVEN CONSERVANCY BILL

Read a Second time and committed.

TEES AND HARTLEPOOL PORT AUTHORITY BILL

Order for Second Reading read.

To be read a Second time upon Thursday.

TOR BAY HARBOUR (TORQUAY MARINA ETC.) BILL

Read a Second time and committed.

Oral Answers to Questions — DEFENCE

Falklands Campaign (Argentine Weapons and Equipment)

Mr. Hoyle: asked the Secretary of State for Defence, pursuant to the reply of the Under-Secretary of State for the Armed Forces on 16 November, Official Report, c. 136, whether the Exocets used by the Argentine contained British components.

The Minister of State for Defence Procurement (Mr. Geoffrey Pattie): It may be of assistance to the House if, in answering this question, I explain that there are three types of Exocet currently in production: the ship-to-ship MM38, which is in service with the Royal Navy, the air-launched AM39, and the more recently developed, advanced ship-to-ship version known as MM40. The Royal Navy's purchase of MM38, negotiation of which began under the Labour Government, was arranged under a memorandum of understanding finally signed by the Conservative Government in June 1971. One object of this memorandum of understanding was to ensure that a significant package of work was placed with British firms as an offset. Because of their expertise, British firms have also obtained a number of contracts for the other two Exocet programmes that I have mentioned, in addition to the work on MM38.
Although we are aware of the volume of components supplied by British subcontractors to the French prime contractor, SNIAS, we would not expect to have information on the ultimate destination of the large number of individual components concerned.

Mr. Hoyle: Does the Minister agree, having given that answer, that, as 40 British companies are manufacturing parts for the Exocet, it is possible that British components could have been fitted to the Exocets that were used by the Argentines in the Falklands? Does he further agree that, as we have condemned the French for re-commencing supplies of the Exocet, if hostilities broke out we could find British components being used in the Exocets that were manufactured previously and sold to the Argentines? Does he agree that that would be indefensible, immoral and hypocritical?

Mr. Pattie: The considerations that the hon. Gentleman raises must have been in the mind of the Labour Government in 1969 when they drew up the memorandum of understanding that applied to the acquisition of the Exocet system by the Royal Navy. As the Royal Navy will still be taking deliveries until next year, the hon. Gentleman's question does not apply.

Mr. Robert Atkins: Is it not true that a number of companies in this country are involved in contracts covering a period much longer than that in which it would have been possible to make a decision on the Falklands conflict, and that decisions have been taken for them to participate in these contracts by Governments of both political parties over a period of years? Does my hon. Friend agree that, while we would not wish to be in any


way associated with weapons that kill British service men, the contractual periods are such that they could apply to Governments of all political parties?

Mr. Pattie: My hon. Friend is absolutely right. The contract period is well over 12 years so far, let alone any period in the future. I think my hon. Friend will agree with me that the type of allegations being levelled from the Opposition Benches are nothing less than nauseating hypocrisy.

Dr. McDonald: When will the Government stop the sale of all arms and components directly or indirectly to Argentina?

Mr. Pattie: The Government's position has been made clear in relation to all completed systems and main systems. I made it clear in my main answer that the normal supply of end-user certificates, which, as the hon. Lady will know, is a way of determining where particular compondents will end up, is not appropriate. The components we are discussing are small and readily available elsewhere in the international market.

Nuclear Warheads

Mr. Chapman: asked the Secretary of State for Defence by how much the Union of Soviet Socialist Republics and other Warsaw Pact countries have increased the number of nuclear warheads targeted on western Europe in the last five years; and by how much the North Atlantic Treaty Organisation countries have responded similarly in the same period.

The Minister of State for the Armed Forces (Mr. Peter Blaker): Since 1977 the number of Soviet warheads on longer range intermediate nuclear missiles targeted on western Europe has increased by about 400 to a total of nearly 1,000 because of the deployment of SS20 missiles, each of which has three independently targetable warheads. NATO has no comparable intermediate missile systems and, moreover, has unilaterally withdrawn 1,000 nuclear warheads for shorter range systems from its inventory. The planned NATO modernisation programme will entail no increase in NATO's warhead numbers.

Mr. Chapman: I hope that my hon. Friend's answer will be heard throughout the country. Does he agree that the figures underline yet again the fact that Russia is spending 50 per cent. more in real terms than the United States on its defence budget? Does he further agree that the imbalance in nuclear weaponry in Europe is the main cause of the sense of insecurity? Does he agree also that the best service that Mr. Andropov can do, if he is in good faith about reducing tension, is to enter into serious negotiations on President Reagan's zero option proposal?

Mr. Blaker: I agree entirely that Russia is spending a much higher percentage of its GDP on defence than is the United States or any other Western country. I am sure that the zero option, meaning that there should be none of these missiles on either side, is the best proposal. I cannot understand why some people seem to have the idea that no Pershing and no cruise but some SS20s is better than the zero option.

Mr. Frank Allaun: Is not Mr. Bush's offer identical to the zero option?

Mr. Mates: No. It is quite different.

Mr. Allaun: Is it not therefore a non-starter? Is it not correct that all the British and French submarine missiles would still remain, as would the British and American bombers at Lakenheath and throughout the country?

Mr. Blaker: The United States has made it clear that it will be prepared to consider other proposals by the Soviet Union. The British and French strategic nuclear deterrents are not included in the INF negotiations. They are strategic missiles, as the Soviet Union recognised in the SALT I negotiations. What is more, if we were to exclude all American intermediate range land-based nuclear forces from Europe, we would frustrate the whole purpose of the 1979 twin track decision, which was to demonstrate American commitment to the defence of Europe in the face of the enormous Soviet intermediate build-up. We would leave the Soviet Union with a monopoly of land-based intermediate range nuclear missiles in Europe.

Mr. Trippier: On the nuclear arms issue, will my hon. Friend remind the House and the country that the campaign for unilateralism being fought by the CND and the Labour party is constantly weakening the West's negotiating position in Geneva?

Mr. Blaker: I agree entirely with my hon. Friend. Furthermore, the reason why the Soviet Union is at last prepared to put forward some proposals, even if they are not satisfactory, is that the West has shown itself resolute and united in pursuing a policy of bringing in the cruise and Pershing missiles in the absence of a satisfactory agreement.

Mr. Denzil Davies: The Minister said that the British Polaris—the independent nuclear deterrent—was not included in the intermediate range talks because it is a strategic weapon. Does that mean that it will be included in the strategic arms reduction talks?

Mr. Blaker: No, Sir. That has also been made clear.

Non-aggression Pact

Mr. Adley: asked the Secretary of State for Defence what is the effect on United Kingdom defence policy of the Russian proposal for a non-aggression pact.

The Secretary of State for Defence (Mr. Michael Heseltine): No changes are planned in the Government's defence policy, but we are carefully studying the Warsaw Pact proposals, including that for a treaty on the mutual non-use of force. NATO is already fully and publicly committed to the non-use of force except in self-defence. Any treaty could not, of course, be a substitute for real progress toward a general reduction in the level of armaments. We await a constructive response to the radical proposals that have been put forward by NATO.

Mr. Adley: The soft words pouring out of the Kremlin make good propaganda, but does my right hon. Friend agree that it is deeds, not words, that count? In view of the ruthless extermination of freedom in the countries of eastern Europe—Hungary, East Germany, Poland and Czechoslovakia—and in Afghanistan, practised by the Soviet Union for the past 40 years, will my right hon. Friend ensure that it is deeds not words that count when it comes to entering upon any of these negotiations?

Mr. Heseltine: I am very grateful to my hon. Friend for that helpful question. It explains a background that has


meant that, since the war, we in this country have been determined to maintain a credible deterrent in favour of peace and that all parties, up to and including this Government, have seen the ability of the Western world to deter the Soviet Union as the single most important guarantee of peace on offer.

Mr. John Silkin: May I first wish the right hon. Gentleman an enjoyable, if abbreviated, tenure of office? How does he consider that the United Kingdom's possession of nuclear weapons enables it to take part in the peace negotiations for the general reduction in nuclear arms about which he spoke when our possession of those nuclear weapons does not allow us even into the negotiating chamber?

Mr. Heseltine: I presume that the right hon. Gentleman, as a leading member of the previous Government, explored all these relative advantages and arguments and that he decided that the nature of the Western Alliance was such, and has been such since the 1940s, that Britain, under Labour or Conservative Governments, believed itself to be a fully integrated member of the Alliance and of the negotiating posture of the West.

Mr. Silkin: The right hon. Gentleman believes, does he not, that the United Kingdom has no place in the negotiating chamber and wishes to leave the matter entirely to the United States?

Mr. Heseltine: The position is the same as that which existed under the Government whom the right hon. Gentleman supported. If it was so profoundly unsatisfactory, why did he not change it?

Mr. Speaker: Mr. Nicholas Lyell.

Mr. Silkin: Why does not the right hon. Gentleman answer the question?

Mr. Heseltine: The position is the same.

Mr. Speaker: Order. Will the Front Benches be as self-restrained as the rest of the House?

Mr. Lyell: I revert to the question of non-aggression. While one would welcome any genuine moves in that direction from the Soviet Union, might it not make a major start by reducing the 19,000 battle tanks that it seeks to keep on the borders between Western and Eastern Europe, which compares with 6,000 or 7,000 in NATO?

Mr. Heseltine: I am grateful to my hon. and learned Friend for that question. He will be aware that the Soviet Union and the Warsaw Pact enjoy a superiority not simply in tanks. That superiority exists in many of the conventional forces of eastern European countries. It is precisely because of that, and precisely because the eastern European countries did not reduce their conventional forces after 1945 whereas the West did that it was necessary for us to form the NATO Alliance in the first place.

Nuclear Bases

Miss Wright: asked the Secretary of State for Defence whether he will list the United States nuclear bases in Great Britain.

Mr. Blaker: There is a facility for United States Poseidon submarines at Holy Loch, and United States

aircraft with a nuclear as well as a conventional capability are based at two RAF stations in the United Kingdom. It is not the practice either to confirm or deny the presence or absence of nuclear weapons at any particular location.

Miss Wright: Are the Government prepared to include a list of these bases in any advertisements that they may take relating to the nuclear disarmament debate? Does he not agree that the anxiety of members of the Campaign for Nuclear Disarmament, is understandable and that we cannot discover from the Government any information about where the nuclear arms are held or what sort of danger they represent to the nation?

Mr. Blaker: It has been the policy of successive Governments neither to confirm nor deny the presence or absence of muclear weapons at any particular location. That was the policy of Labour Governments.
There has been a great deal of misinformation about lists of United States bases. Some newspapers—the New Statesman, for example—alleged that there were over 100 United States bases in the United Kingdom. Upon investigation, one of them turned out to be a petrol pump in the Edgware Road. If hon. Gentlemen want to know where United States bases are in the United Kingdom they have only to look at the questions answered by my right hon. Friend the Secretary of State in 1980 and 1981, largely in answer to the hon. Member for Keighley (Mr. Cryer).

Mr. Wilkinson: Does my hon. Friend agree that these bases are the ultimate guarantee of our security and that we would be much more vulnerable were the United States deterrent to be wielded on our behalf without there being such bases in the United Kingdom?

Mr. Blaker: I entirely agree that they are the guarantee of our liberty and have been ever since they have been here with the consent of Governments of both parties. I was interested to see that in a recent public opinion poll the majority of Labour voters supported the retention of United States bases in this country.

Mr. Denzil Davies: Does the Minister agree that many of those bases, not just in Great Britain but in Europe, are the consequence of NATO's first use of nuclear weapons doctrine? Rather than trying to market the bomb, would it not be better for the Government to conduct a campaign within NATO to move away from first use to no first use of nuclear weapons? Many of those bases would not then be necessary.

Mr. Blaker: I do not agree with the right hon. Gentleman's premise. We have a better policy, which is no first use of any weapons. A doctrine or statement from the Soviet Union about no first us of nuclear weapons would be entirely unverifiable. It is not one upon which I should recommend we rely, since the Soviet Union has breached so many of its undertakings in the past.

Cruise Missiles

Mr. Renton: asked the Secretary of State for Defence whether he will set out in detail the arrangements regarding the use of cruise missiles referred to in the answer of 14 December, Official Report, c. 124; and whether, in the light of developments in the negotiations for multilateral disarmament, he will review these arrangements.

Mr. Penhaligon: asked the Secretary of State for Defence if he will make a statement on the precise method of dual-key control for cruise missiles.

Mr. Heseltine: The use by United States forces of bases in this country in an emergency—including those bases to which cruise missiles will be deployed in the absence of concrete results from the arms control negotiations in Geneva—would be a matter for joint decision between the two Governments in the light of circumstances at the time. The Government have satisfied themselves that these arrangements, which have existed for nearly 30 years and have been supported by successive Governments, remain fully effective.

Mr. Renton: I thank my right hon. Friend for his full answer, but does he agree that while the vast majority of British people want us to have an independent nuclear deterrent, they are anxious at the prospect of such a deterrent, based on British soil, not being under sovereign British control? Will he therefore make the public as fully aware of the facts as possible and deal with this anxiety throughout the year with all his usual diplomacy?

Mr. Heseltine: I am grateful to my hon. Friend for his comments. I hope that I have made it absolutely clear that the bases from which nuclear weapons could be deployed would not be used except by the joint decision of the American and British Governments. The decision would be taken in the light of circumstances—

Mr. Cryer: "In the light of circumstances" can mean anything.

Mr. Heseltine: —prevailing at the time.

Mr. Cryer: What about consultation?

Mr. Heseltine: There is no reference to consultation in the decision-taking process. Mr. Speaker, although the hon. Member for Keighley (Mr. Cryer) did not ask the original question, I accept, and everyone understands, that this is a matter of massive national interest. If it will help the House I shall read briefly from the arrangements that exist between this country and the United States. They were the arrangements that were discussed earlier between Mr. Attlee and Mr. Truman and later between Mr. Churchill and Mr. Truman. The communiqué was issued in January 1952 in the following terms:
Under arrangements made for the common defence, the United States has the use of certain bases in the United Kingdom. We reaffirm the understanding that the use of these bases in an emergency would be a matter for joint decision by Her Majesty's Government and the United States Government in the light of circumstances at the time.

Mr. Penhaligon: Whatever the merits of the arrangements that the Secretary of State has just read to the House, why does he not believe that dual control would be better?

Mr. Heseltine: It is not a matter of dogma or theology. The offer was discussed between the United States and the countries of Europe when the decisions to deploy cruise and Pershing misslies were taken. The offer of a dual key was available. The Governments of Europe took their respective views. I can speak specifically only for the way in which this Government took their decision. Our view was that in the light of the experience of the arrangements to which I have referred, over a significant period of time and under Governments of both parties, there was no case for the additional strain on the defence budget that would

have been imposed by buying the cruise platform systems when they would be fully protected under the arrangements that were on offer.
The House will of course appreciate that the arrangements that I have read out are precisely the arrangements that apply to the use by the United States of bases for the Poseidon submarine and the F-111 bombers. The agreements are reviewed and reaffirmed when a British Prime Minister or a President of the United States first takes office. These agreements were last reaffirmed by President Reagan and previously by the Prime Minister when she was first elected to No. 10 three and a half years ago.

Mr. Alan Clark: Are not the arrangements that were formulated some 30 years ago for sub-sonic aircraft and free-fall bombs wholly inappropriate for dispersed missiles with electronic triggers and targeting? The sooner my right hon. Friend starts making arrangements to return control of the missiles to Britons answerable to the Crown and the House, the better.

Mr. Heseltine: I understand fully the depth of feeling that exists on this issue. It might help my hon. Friend to understand that the arrangements governing the use of the bases would come into effect much sooner than the decisions to use weapons in the context in which my hon. Friend describes the rather delicate electronic machinery for firing the weapons.
The decisions to use the bases would be at a much earlier and therefore much more important stage of the process in that context.

Mr. Denzil Davies: Does the Secretary of State not get the point that the agreement reached a long time ago was about bases and not about the cruise missile, which is wholly different from the original weapons? If this missile were fired, which God forbid, Britain could then expect massive nuclear retaliation. Does the Secretary of State not owe it to the British people to have proper physical control over the firing of the missile?

Mr. Heseltine: The right hon. Gentleman will realise that there has always been an understanding that the Soviets could conceivably use Great Britain as a target. We are anxious about the number of Soviet weapons systems targeted on Western Europe today, and that is why we consider it necessary to have the deterrent effect of the dispersal of the cruise and Pershing missiles.

Several Hon. Members: rose—

Mr. Speaker: Order. We shall return to this question later.

Nuclear Tests (Radiation Compensation)

Mr. Allan Roberts: asked the Secretary of State for Defence what is the policy of Her Majesty's Government towards widows of ex-service men whose husbands died after service where they could have suffered from the consequences of the testing of nuclear weapons.

The Under-Secretary of State for the Armed Forces (Mr. Jerry Wiggin): Were the Department of Health and Social Security to accept that death arose from causes related to service, it would award a war widow's pension; and if the Ministry of Defence also accepted that death arose from such causes, provided the husband served on or after 31 March 1973, an attributable widow's pension would be awarded.

Mr. Roberts: Is the Minister aware that there are cases in which the DHSS has accepted that death was caused by contact with nuclear weapons when they were tested, but that the Ministry of Defence has refused to accept that? Now that we have a new Secretary of State for Defence, will he show some compassion towards widows of ex-service men who died because they were in an area where nuclear weapons were tested? Is he aware that many of those widows fear that the Ministry of Defence is refusing to accept its responsibilities because it does not wish the British people to know about the horrific consequences of nuclear weapons, even when they are being tested in a controlled manner.

Mr. Wiggin: In one case there is a disparity of view between the two Departments. The reasons for the success of the lady's appeal was purely legal. As to medical evidence, my Department does not accept that the death of the person was due in any way to the causes suggested by the hon. Gentleman.

Mr. Ashley: As the Ministry of Defence has said categorically that safety precautions at the time were more than adequate to preclude health risks, is it not the case that Ministers have prejudged the issue and that what we need now is an independent assessment of the entire position?

Mr. Wiggin: In the case that has been mentioned, we must, as must all Ministers, bow to the advice given to us by our medical advisers. In this case the medical advisers were in no doubt. On the more general question, the right hon. Gentleman will find that there is another question to be answered soon by my hon. Friend.

Mr. Skinner: Yes, mine. No. 15.

Space Programme

Mr. Palmer: asked the Secretary of State for Defence if he will make a statement on the United Kingdom's independent military space programme.

Mr. Pattie: The United Kingdom's military space requirements are primarily for communications and navigation technology. They are formulated wherever possible in co-ordination with our NATO allies, with whom we assess the military implications of developments in space technology.

Mr. Palmer: Is it intended to replace the independent military satellite Skynet 2B, which turned out to be unreliable during the Falklands operation, with another independent British satellite, or is it intended to rely on the United States or NATO?

Mr. Pattie: The hon. Gentleman will probably be aware that the British Aerospace Dynamics Group in his constituency, and Marconi Space and Defence Systems Ltd., are co-operating on Skynet 4, which is expected to provide the satellite communications that we need between 1985 and 1990.

Mr. Wilkinson: Will my hon. Friend consider consulting much more with the French on space matters, especially on the possibility of adopting an Anglo-French reconnaissance capability and, secondly, to support a booster beyond Ariane 4?

Mr. Pattie: We are always prepared to consult the French on such matters.

Trident

Mr. Eastham: asked the Secretary of State for Defence, in view of the fall in the value of the £ sterling, what is the current estimate of the foreign exchange cost of Trident.

Mr. Blaker: It is still about 45 per cent. of the total.

Mr. Eastham: I find the figure rather breathtaking. When one considers the Serpell report, one realises that with that sum of money the railway lines from Manchester to London could be coated in gold plate. Is it now safe enough to presume that, by the time Trident is delivered, it will probably cost about £10 billion? As we have thousands of homeless, could we not build 500,000 houses instead of having this terrible, wicked waste on an unnecessary weapon?

Mr. Blaker: I understood the hon. Gentleman to forecast a serious escalation in the estimated cost of the system. It is noteworthy that the first change to be announced in the cost of £7,500 million was a significant decrease resulting from the plans for servicing in the United State of America. I see no reason to expect the estimates to be seriously exceeded. The original Polaris programme did not exceed its budget. The Trident D5 missile is a fourth generation missile, and the others have kept to their budgets.

Mr. Bill Walker: Does my hon. Friend agree that, whatever the present cost of Trident, during its lifetime it will be the most inexpensive piece of equipment that the military will have, because it can inflict damage that no other equipment could at that price and, therefore, will be a deterrent?

Mr. Blaker: I agree with my hon. Friend that Trident will be very good value for money. When the Polaris system ceases to be effective at some time in the 1990s, if we are to continue to have a nuclear deterrent, Trident is without doubt the best value. Its full-life cost will be about 12p per head of the population per week, which is slightly less than the cost of a second-class postage stamp.

Dr. McDonald: Is the hon. Gentleman aware that the recent fall in sterling has added £750 million to the cost of Trident, which is a 7 per cent. increase in real terms? Does that not show that the cost of Trident is completely outside the Government's control, and does it not put a further squeeze on the budget for conventional weapons? Does not such a squeeze weaken the nation's defences?

Mr. Blaker: I said in my original answer that I estimated the foreign exchange costs of Trident to be still about 45 per cent. of the total. The increase resulting from the fall in sterling is offset by other changes in the detailed make-up of the Trident costing.

Cruise Missiles

Mr. Andrew F. Bennett: asked the Secretary of State for Defence whether, during dispersals of cruise missile launchers, for practices or during an alert, they will use sites under public or private ownership; and if under private ownership, whether permission of the private owners will be negotiated.

Mr. Blaker: Practice peace time dispersals of cruise missile launchers will use public roads and Ministry of Defence land. It is not in the interests of security to comment on dispersals in times of tension or war.

Mr. Bennett: Does the Minister appreciate that the vast majority of people in Britain do not want cruise missiles anywhere and that they will be especially alarmed at the thought that the missiles will be moved along public roads and deployed on small corners of land up and down the country? When that takes place there will be many demonstrations around those sites, which will cause much difficulty to the programme. Would it not be a good idea to cancel the whole system here and now?

Mr. Blaker: I have learnt from recent public opinion polls that a large majority of British people support our independent strategic nuclear deterrent and oppose a policy of one-sided disarmament by the Government. Those figures include a majority of Labour voters in each case. As I said, in peace time the deployments will be on Ministry of Defence land.

Mr. Robert Atkins: Does my hon. Friend agree that it will be as reassuring to the populace of Britain to see cruise missile launchers being moved around the countryside as it is now to see ships at sea or aeroplanes in the air or ordinary military convoys? Does my hon. Friend recognise that it is just as important to have those missiles to defend our freedom as it is to have an independent nuclear deterrent?

Mr. Blaker: My hon. Friend is absolutely right. The cruise missiles will be brought here, in the absence of agreement to reduce them at the negotiations in Geneva, at the request of the European countries. They are not being imposed on us by the Americans. There is much misinformation about cruise missiles, which accounts for some of the anxiety to which my right hon. Friend referred. It is our purpose to put right the information. It has been alleged, for example, by the CND that the missiles would be used for a first strike. That is totally untrue. It is impossible to use them for that purpose.

Mr. John Silkin: Does not the Minister of State's first reply show how irrelevant was the reply of the Secretary of State for Defence to my right hon. Friend the Member for Llanelli (Mr. Davies)? As we are talking about roads, what relevance do the bases have? The fact of the matter is that Britain has no control over the cruise missiles, whatever the truth may be about the bases.

Mr. Blaker: My right hon. Friend has dealt carefully, fairly and explicitly with the question of control and I have nothing to add.

Nuclear Tests (Radiation Compensation)

Mr. Colvin: asked the Secretary of State for Defence if he will make a statement on the survey that he intends to carry out of those British service men who were involved in the Christmas Island nuclear weapon tests in the 1950s.

Mr. Skinner: asked the Secretary of State for Defence whether he will appoint an independent body to investigate fully the number of deaths from cancer resulting from the A-bomb and H-bomb tests on Christmas Island in the 1950s.

Mr. Pattie: The Ministry of Defence announced on 12 January 1983 that it would commission a health survey of British personnel who took part in the Australian and Christmas Island atmospheric test programmes in the 1950s. Independent radiological protection authorities will

participate fully in this survey. The survey is being designed to establish whether the incidence of radiation-associated diseases amongst those who participated in the tests is significantly different from that for a comparable body of men not involved in nuclear testing. It will be conducted on the basis of information already accessible to the Government. It is intended that the results of the survey will be published.

Mr. Colvin: Will my hon. Friend take this opportunity to congratulate Mr. Peter de Ionno of the Western Daily Press, whose highly successful investigative journalism has stimulated public debate on this issue? Does he agree that this investigation should take place under the auspices of the Department of Health and Social Security in order to maintain strict impartiality and that, perhaps, a special team from one of our leading universities should be appointed to look into the medical records of those who took part in the tests and those who have died since?

Mr. Pattie: I do not think that this is a matter for the DHSS, although it will obviously be closely involved in the study as it develops. We have a nominal list of all service and civilian test personnel, but we must make a considerable analysis of that first to be able to provide the full data to the Office of Population Censuses and Surveys, which is the body that will conduct the preliminary investigation.

Mr. Skinner: Will the Minister ensure that that independent inquiry will not take too long in view of the dire circumstances in which many of the people affected are living, in particular those widows whose husbands have lost their lives through cancer as a result, they would argue—I agree with them—of being present on Christmas Island during the tests? Is the Minister aware that one of the most important factors in deciding industrial benefits of any kind—disablement benefit, war pensions, and industrial death benefits for widows—is whether the person concerned was there as a result of his or her employment and in this case they were there acting on behalf of the state—

Mr. Speaker: Order. The hon. Gentleman has asked his question.

Mr. Skinner: rose—

Mr. Speaker: Order. The hon. Gentleman was proceding to an argument in support of his question.

Mr. Skinner: No.

Mr. Speaker: That was my judgment.

Mr. Pattie: I assure the hon. Gentleman that I understood his point, despite the length at which it was made. There will be no unnecessary prolongation of this, but I think that the hon. Gentleman will agree that although he supports the fact that the presence of those people in the South Pacific at the time the tests took place must have been the cause of their cancer, we must see whether we can establish that that was the case.

Falkland Islands (Fishing Tackle)

Mr. Beith: asked the Secretary of State for Defence how he compiled the list of firms which were invited to tender for the provision of fishing tackle to Her Majesty's forces in the Falkland Islands.

The Under-Secretary of State for Defence Procurement (Mr. Ian Stewart): Since the purchase of the fishing tackle was made from non-public welfare funds the Ministry of Defence has no involvement with the transaction. I understand, however, that the military staff in the Falklands selected the range of firms they approached from their own knowledge and from specialist publications.

Mr. Beith: Why does not the Ministry of Defence buy British? Why was one of the best-known British manufacturing firms—Hardy' s of Alnwick—not included in the list?

Mr. Stewart: The answer to that is in the reply that I have already given. The equipment was bought with welfare funds because that procedure could be followed more quickly in order to get fishing tackle to the troops in the Falklands for recreation purposes.

Mr. Ogden: Was any of this fishing equipment made available to the unofficial president's fund of the Queen's Own Highlanders, then commanded by Lieutenant Col. Ridley at Goose Green, East Falklands? If so, at what price was it made available to the fund and at what price was it made available to the non-commissioned ranks? There is a great deal of information to the effect that that fund was grossly overcharging non-commissioned troops stationed there for airmail letters, beer and cigarettes, in some cases more than 250 per cent. above local charges. Will the hon. Gentleman now issue proper guidelines for the composition—[Interruption.]—management, and prices and profit margins of such regimental funds—

Mr. Speaker: Order. The hon. Gentleman has asked his question.

Mr. Ogden: The Minister has as well.

Mr. Speaker: Order. If the hon. Gentleman shouts at me like that again I shall ask him to leave the Chamber.

Mr. Ogden: rose—

Mr. Speaker: Order. Let the Minister reply.

Mr. Stewart: As I have already explained, the funds with which this equipment was bought were provided out of welfare funds and are, therefore, not the responsibility of the Ministry of Defence. The welfare funds were at the discretion of the commander of the British Forces on the Falkland Islands, and if the hon. Gentleman wants more information I suggest he communicates with him.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Silvester: asked the Prime Minister if she will list her official engagements for 1 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Silvester: Will my right hon. Friend today urge the water workers, when they come to consider whether to call off their strike, to remember that their present action is putting at risk the jobs of many other workers who have accepted pay settlements well below that currently on offer?

The Prime Minister: I agree with my hon. Friend that there are many people with less secure jobs who would envy the offer that has already been made to the water workers and there are many, many, unemployed people who would like to have similar pay to that which has been offered to the water workers—£145 to £146 a week. As that offer was made as a result of mediation, I hope that the water workers will soon take wiser counsel than they have previously, and return to work. I notice that a MORI poll has just come out which shows that 75 per cent. of the population believe that the water workers should accept the offer that has been made.

Mr. David Steel: Has the Prime Minister studied the CBI industrial trends survey, which was published this morning? If so, has she noted that investment in manufacturing industries is expected to decline next year as well? Therefore, will she gear her Budget strategy to investment in industry?

The Prime Minister: As the right hon. Gentleman knows, there were many years when the rising standard of living through wages was at the expense of money that should have gone into investment. That is one of the problems that we now have. There will be a substantial increase in investment in, for example, consumer goods industries, only when there is an increase in consumer expenditure. The right hon. Gentleman will have noticed from that survey that there are signs of increased demand and activity among some industries producing consumer goods. There is also considerable optimism about exports. There are excellent figures for exports and some good figures that augur well for low inflation in future.

Mr. Alexander: Will my right hon. Friend take time today to reflect on the reported remarks of the Archbishop of Canterbury last week, to the effect that it would never be just to use nuclear weapons in retaliation for a nuclear attack? Does she agree that if a potential enemy is told that weapons will never be used in retaliation, the enemy will never be convinced of one's determination to resist?

The Prime Minister: Without making any comment on the remarks of His Grace, for which I am not responsible, I agree with my hon. Friend that the point of having nuclear weapons is to deter a war of any kind. They have succeeded in doing so for the past 37 years. To be an effective deterrent a potential aggressor must believe that under certain circumstances such weapons will be used.

Mr. Foot: If the right hon. Lady thinks that she has a good case, why is she not content to put it to the country instead of suggesting that public money should be used to support it? It has been suggested in the newspapers that the right hon. Lady supports the idea of spending £1 million to support Conservative party propaganda. Will she take this opportunity to repudiate that? If sums of that kind are available for propaganda, why have the Government refused to spend a single penny in supporting the world disarmament campaign, agreed on in the special session of the United Nations—a campaign which she alleged she would support?

The Prime Minister: With regard to the reports about an advertising campaign, no decision has been made, but I note that there is a very effective precedent, which was followed in 1969, when the NATO policy, which involved nuclear deterrents and Polaris, was put across. People


were urged with full-length advertisements in the papers to write for booklets that would give them full details about NATO and Polaris. That campaign in 1969 cost the equivalent of £1 million today.
The right hon. Gentleman appeared to be saying two things at the same time with his other point. First, he criticised us for thinking of using advertisements, and then for not spending money on disarmament when we are the party of multilateral disarmament. I am glad that the right hon. Gentleman seems to agree that that would be a fit and proper subject for advertisement.

Mr. Foot: If the right hon. Lady is to embark on these campaigns, will she make some effort to see that she tells the truth? [HON MEMBERS: "Oh".] She gave the House, and perhaps the country, the impression that her Government had been backing proposals for multilateral disarmament. Will she put in one of the advertisements, or in Hansard, a list of the occasions, at the end of last year, when she voted at the United Nations against proposals for multilateral disarmament and when this Government were in a minority of one, two or three in voting against proposals for disarmament? If she wishes to tell the truth to the country she should tell it that.

The Prime Minister: I am grateful for the right hon. Gentleman's recommendation that we should put out certain information in advertisements. I am sure that my right hon. Friend the Secretary of State for Defence will have taken his advice into account on that matter. I shall make certain that if any record is published about votes in the United Nations, the full resolution is published, together with the reason for voting. We are a party that believes in multilateral disarmament as being the only disarmament that has to be on a balanced and verifiable basis.

Mr. Foot: In direct response to that point, if the right hon. Lady is to use public money to put her case, we shall demand public money to put our case, as we have not the slightest confidence that the right hon. Lady will tell the truth to the country on this subject.

The Prime Minister: The right hon. Gentleman's Government in 1969 used public money to put the NATO case to the country.

Mr. Mates: Is my right hon. Friend aware that some water workers in my constituency came to see me on Saturday—[HON. MEMBERS: "What a drip".]—to complain about the so-called democratic process within their union? Is she further aware that they told me that they were prevented from taking part in the second ballot because they could not get to their places of work due to the pickets? The only workers who voted in the second ballot were those who were on the pickets, who are, by definition, against the offer. As this makes nonsense of the water workers' claim to have a 4:1 majority in favour of continuing the strike, will she take urgent steps to introduce proper, democratic processes?

The Prime Minister: As my hon. Friend knows, my right hon. Friend the Secretary of State for the Environment put out a discussion document on these matters. I hope that the water workers will consider the offer that has been made through mediation. In May 1979 the average pay of the water worker was £88·70. Before the dispute started, the average was £136·90. They have

now been offered £146 on average. That is an increase of 64 per cent. since May 1979, when the retail price index has gone up by only 52 per cent.

Mr. J. Enoch Powell: In the talks that are taking place between the Secretary of State for Northern Ireland and the Irish Foreign Minister, will the Prime Minister confirm that nothing will be said on the British side that is inconsistent with her principle that the constitutional arrangements in Northern Ireland are exclusively a matter for this House and the people of the Province?

The Prime Minister: I agree with the right hon. Gentleman that constitutional changes, if such there be, in Northern Ireland are for the people of Northern Ireland and for the House of Commons and the other part of Parliament.

Mr. Arthur Davidson: asked the Prime Minister if she will list her official engagements for Tuesday 1 February.

The Prime Minister: I refer the hon. and learned Gentleman to the reply that I gave some moments ago.

Mr. Davidson: Will the Prime Minister explain the difference between the zero option, from which she is apparently moving, and President Reagan's latest offer to Mr. Andropov?

The Prime Minister: I understand that the latest offer reaffirms the zero option which, let us be clear, is the best possible option, because it does away with all nuclear weapons of a particular class. Before that offer was made there was the NATO double track decision, which, in the absence of the zero option, is based on equal numbers and proper counting.

Sir Peter Emery: Will my right hon. Friend, within the nuclear debate, make it clear that if cruise missiles are to be based in this country they will be fired only after joint consultations between this Government and the American Government, thus making it clear that it is a decision for both Governments?

The Prime Minister: The phrase goes further than "joint consultations." The phrase on the use of those bases refers to a "joint decision", which means a decision of both Governments after consultation.

Mr. Roy Jenkins: Does the Prime Minister accept that the 1969 advertisements, apart from the broad consensus on the issue that then existed, were almost entirely factual reports, not a propaganda campaign of the type that appeared to be envisaged in the reports yesterday? In view of the spate of adverse editorial and political comment, does she accept that those who wish to contravert unilateral disarmament, which I do as strongly as she, could do it better by political arguments than by spending taxpayers' money subsidising advertisements?

The Prime Minister: The right hon. Gentleman was Chancellor of the Exchequer at the time when money was spent on those advertisements. The policy in support of NATO was won. The vast majority of people at the moment are in support of NATO and of multilateral disarmament. We stand by both. I am somewhat amazed that the right hon. Gentleman should say that all members of the party to which he then belonged were in favour of Polaris. If that is so, I cannot think why it later held up any publicity on the modernisation of Polaris with Chevaline.

Mr. Bidwell: asked the Prime Minister if she will list her official engagements for Tuesday 1 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Bidwell: Does the right hon. Lady understand that her remarks in this Chamber on the water industry dispute have been exceedingly unhelpful? Taking examples of average earnings is always dodgy, especially if related to the Members of the House. With regard to the right hon. Lady's remarks last Thursday, may I point out that the report of a mediator connected with ACAS is not holy writ, as evidenced by the recent decision of the Department of Defence, when the Government turned down a mediator's proposal in the dispute with the Transport and General Workers Union?

The Prime Minister: I am sorry that the facts get in the hon. Gentleman's way, as that is virtually all that I have given him in connection with this dispute.
The hon. Gentleman knows that the agreement between the employers and the employees is that the dispute, if such there be, should go to arbitration before there is industrial action. With regard to this dispute, the water workers wanted mediation and the employers agreed to it. The water workers agreed the name of the mediator, as did the employers. The mediator pronounced, and the employers accepted his decision. We are now awaiting the decision of the water workers.

Mr. Arthur Lewis: On a point of order, Mr. Speaker. I think that I am correct in saying that on occasions you,

with the Leader of the House and what are known as the usual channels, discuss the procedure of the House. Next time that happens, will you consider the possibility that Privy Councillors should have their own time to put questions to the Prime Minister, and not keep muscling in by taking up two-thirds, if not 90 per cent., of the time that should be for Back Benchers, who take the trouble to table questions? Privy Councillors enter the Chanber just before the Prime Minister gets to her feet.

Mr. Speaker: Order. I always listen with the utmost respect to what the hon. Member for Newham, North-West (Mr. Lewis) says. I have no doubt that Privy Councillors will do the same.

Mr. Cryer: Further to that point of order, Mr. Speaker. Could hon. Members be selected to ask questions during Prime Minister's Question Time on the basis of those whose questions are among the first 10 or 12 on the Order Paper by virtue of random selection? It would work out perfectly fairly and would prevent the invidious accusations that Privy Councillors receive more opportunities than other Members, as we are all elected on an absolutely fair and equal basis.

Mr. Speaker: Order. This gives me an opportunity to say that I shall call a conference of the various parties to consider the outrageous way in which Prime Minister's Question Time is being ruined. I honestly believe that the open question has changed the character of Question Time. I welcome a conference. I shall now call the respective parties to my House to discuss how to get over this.

Water Industry (Dispute)

The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I shall make a statement about the industrial action in the water industry.
Since my statement last Monday there has been some increase in the number of people advised to boil water, as a precaution. This figure is now approximately 5·5 million. About 20,000 properties are without their mains water supply, but arrangements have been or are being made to provide supplies from standpipes or tankers. Some properties that had lost supplies have been reconnected.
The quality of effluent from some sewage treatment works has deteriorated, but so far without serious effect on rivers. No significant pollution incidents have been reported. I am glad to tell the House that so far it has been possible to avoid or avert risks to public health.
In my previous statement, I expressed the hope that agreement would be reached that day at a meeting of the Water Industry National Joint Industrial Council.
I remind the House that both parties to the dispute had already agreed a procedure with ACAS for reaching a settlement, involving negotiations under an independent chairman, mediation by the chairman and, in the last resort, arbitration. An independent mediator was appointed by ACAS. He made a number of specific recommendations, which were subsequently accepted by the employers. They, therefore, made a further offer, reflecting his recommendations.
The employers offered an increase of 7·3 per cent. to run for 16 months from 5 December 1982 together with an increase in the service supplement for manual employees with more than five years service. The mediator, in paragraph 8 of his report, suggested further talks about increased earnings opportunities through bonus schemes and greater efficiency.
I have placed in the Library copies of the agreed procedure, together with the mediator's report.
Although the unions specifically requested mediation and agreed the mediator's terms of reference, they rejected the employers' offer based on his recommendations. On Saturday they announced the continuation of strike action, without any reference to the agreed procedure for the resolution of this dispute, which, as a last resort, provides for arbitration.
ACAS met the employers' side yesterday. There have been further discussions today. I understand that ACAS is seeing the unions this evening.
The House will hope that the efforts of ACAS will enable this damaging dispute to be brought to the earliest possible conclusion. In the meantime, I know that the House will be anxious to see that the emergency cover continues to be provided and that hardship and distress are not caused. Whatever the dispute, there cannot be any justification for actions which hurt those least able to help themselves.
There are clearly two main options to achieve an end to the dispute and an immediate return to work. Either the mediator's recommendation of urgent discussions on the various ways in which the earnings opportunities of water workers can be improved is pursued further or, if this

course is unacceptable, the terms of the national agreement regarding arbitration should be followed. The way is there. It must be taken.

Mr. Gerald Kaufman: I agree with the Secretary of State about the potential exceptional gravity of this dispute and the potential hardship to many millions of our fellow citizens. I agree with him about hardly anything else.
It is not true, as the Secretary of State has claimed, that the employers' offer is based on the mediator's recommendation. It is based on one of the two recommendations in paragraph 9. No offer has been made by the employers on the basis of paragraph 8, which calls for an understanding, positive and determined response to the workers' grievance on comparability. The mediator says in that paragraph:
I recommend that they now do so as a matter of great urgency.
The unions sent a telex to the employers on Saturday asking for negotiations on the mediator's report. They have had no reply to that urgent communication. Meanwhile, the House has a right to a full report from the Secretary of State on the part that he has been playing in this dispute.
Will the Secretary of State report to the House on his reported secret meeting last Thursday evening with three water council chairmen, including Sir William Dugdale, all of them members of the Conservative party? Will he give the House the facts on his reported attempt to pressure Sir William Dugdale into changing the composition of the negotiating group, including removing the chairman, Mr. Len Hill? Will he explain why Mr. Len Hill was excluded from the meeting last Thursday evening?
Is it not a fact that if the workers had not adhered meticulously to their code of practice the danger to the health of the people of this country would already be one of incalculable gravity and that the insults to them by the Secretary of State, the Secretary of State for Employment and the Prime Minister are doing nothing to help? Will the right hon. Gentleman now ask the employers to respond immediately to the trade unions request for negotiations? The right hon. Gentleman said on television on Sunday:
We back the judgment of the independent mediator".
Will he therefore give a categorical assurance that the employers are free to negotiate on the whole of the mediator's report?
Should not the prime concern—[Interruption.] This is a major crisis brought about by the Government. Should not the prime concern of the House be the grave danger to the health of our fellow citizens and to the country's industry? It is the Secretary of State's duty to bring about a speedy and honourable conclusion to the dispute by encouraging urgent negotiations. That is also the duty of the Opposition. If the right hon. Gentleman will not do his duty, we shall do ours.

Mr. King: With great respect, I do not think that the right hon. Gentleman can have listened to my statement. He invites the employers to respond to the recommendations in paragraph 8 of the mediator's report. I have just said that. As he knows, improving the earnings opportunities of water workers by the various methods that I described in my statement is precisely what paragraph 8 is about. Indeed, I concluded my statement by saying that one of the two options that should be pursued was the mediator's recommendations for urgent discussions in


various ways. The negotiating team, ably led by Mr. Len Hill, chairman of the South-West water authority, made it clear publicly that those recommendations were broadly acceptable. I certainly believe that that is the course that should be pursued.
The right hon. Gentleman seems unable to resist any rumour or smear, no matter how grave the issue before the House. I am glad that he has given me the opportunity to contradict the lie about a secret meeting. I assure the right hon. Gentleman that if I were to hold a secret meeting it would not be held in my Department, during normal working hours, with officials present on both sides and with all the chairmen of the national water authorities who were available in London on that day. I had hoped that Mr. Len Hill would be able to come to the meeting, but as chairman of the South-West water authority, and in view of the seriousness of the dispute, he naturally needed to spend some time in his own authority.
The suggestion that I am seeking to replace Mr. Hill as leader of the employers' negotiating team is entirely false. I have considerable respect for his ability and as a negotiator and I am surprised that the right hon. Gentleman should wish to introduce such a totally unjustified and singularly unpleasant smear.

Mr. Kaufman: rose—

Hon. Members: Withdraw.

Mr. Kaufman: The right hon. Gentleman well knows that for three months he has been putting pressure on the negotiators behind the scenes and that it was his intervention that prevented a settlement towards the end of last year. The information available to us after careful inquiry does not accord with what the Secretary of State has told the House. Mr. Hill did not know that the meeting was taking place. It is most peculiar that the only people available were those who agreed politically with the Secretary of State. It is also interesting that information has come to us that there was resistance by the employers to the replacement of Mr. Len Hill. We certainly agree that Mr. Hill carries—[HON. MEMBERS: "Withdraw."] No, I shall not withdraw. [Interruption.]

Mr. Speaker: Order. We are dealing with a very serious issue. The whole country is anxious about it. Therefore, we should conduct ourselves properly.

Mr. Kaufman: The Secretary of State does not deny that he held that meeting last Thursday. He has not told that House what went on at it, nor has he explained why it was so urgent that only three water authority chairmen were present and time was not made available for the rest of the nine chairmen to attend. I asked for a report on the meeting, but we have received only a series of denials that do not add up.
I repeat my request. Will the Secretary of State now encourage the employers to respond to the workers' request for negotiations which was made three days ago and to which no response has been received?

Mr. King: I am sorry that the right hon. Gentleman has chosen to return to the issue that I hoped that I had dealt with. In relation to the "secret" meeting, I wish to tell the House with the candour and, I hope, the integrity that it would expect of me that the version that I have given to the House is absolutely correct. The reason why Mr. Hill did not know of the meeting was that it was to be a meeting with my hon. Friend the Under-Secretary of State. The

concerns that arose at that meeting—Sir William Dugdale has put this on record, so I do not mind repeating it—related to the publicity arrangements and whether the water authority chairmen were ensuring that in heir own areas adequate publicity was being given to the terms of what we believed was, in the circumstances, a very fair offer and that their side of the argument was being adequately represented. It was not a question that only three people were present at the meeting. At the last minute, when I heard that the chairmen who were available at the time were coming in, I invited them to my office as I wished to join in the discussions.
That is the truth. If the right hon. Gentleman wishes to pursue the slur that there has been any attempt to replace Mr. Len Hill as leader of the negotiating team, he free to do so, but I hope that he will understand from me—we have crossed swords on other matters and he knows that I value what I consider to be the responsibility of a Minister to the House—that there is no truth whatever in the allegation. I make that clear to the House now. I hope that the right hon. Gentleman will not pursue those arguments, because there are very serious issues at stake, and I am appalled at the attempt to trivialise the issue with smears and rumours of that kind.
Once again, I have made it quite clear, and I understand clearly from the employers—they have said this to the unions directly—that they are more than ready to enter into urgent discussions on paragraph 8 of the mediator's, report. That is what the right hon. Gentleman asked, and that is what they are willing to do.

Mr. Kaufman: First, the Secretary of State has now given two alternative versions of Thursday's meeting, and the two versions are not compatible. Secondly, he has not responded to my request that he now ask the employers to respond to the message sent by the workers on Saturday so that urgent negotiations to resolve the dispute may take place.

Several Hon. Members: rose—

Mr. Speaker: I do not propose to allow the usual length of time on this subject. We have already taker, 20 minutes and have heard that talks are continuing tonight. Therefore, I propose to call a few more hon. Members from each side and then move on.

Mr. Tony Durant: Does my right hon. Friend realise that the general public do not understand why, when an independent mediator has been set up and when an agreement has been reached between the industry and the unions, the unions which were party to that agreement will not accept what the mediator has proposed?

Mr. King: It was made clear in Mr. Lowry's letter that, while it was hoped that the mediator's recommendations could be accepted, they were not binding. If that view is taken, I hope that the right hon. Member for Manchester, Ardwick (Mr. Kaufman) will say that, as that was the term of the ACAS understanding, the further term of the ACAS understanding should be observed. If the second part of the agreed procedure is not acceptable to the unions and with some reluctance the employers have realised an obligation to accept it to end the dispute, there is no question but that it is for the unions to pursue the further agreed procedure that is laid down and signed by them with ACAS.

Mrs. Shirley Williams: Does the Secretary of State agree that it is overwhelmingly in the national interest that the dispute should be ended as soon as possible and that emergency cover has been an important factor? Does he agree that we should recognise the willingness of at least some water workers to keep that emergency cover going? The Secretary of State will be aware that, rightly or wrongly, there has been some suspicion that he has intervened with the National Water Council in the negotiations. Will he give an assurance that in any recourse to arbitration the Government will not instruct or otherwise intervene with the National Water Council in reaching a conclusion that it believes will bring the dispute to an end?

Mr. King: That obviously concerns the ACAS arrangements. It is a matter for both parties. I hope that there can be agreement about an arbitrator who will have to resolve the problem, if that is the course that the unions wish to take. In either circumstance, under the agreement, there should be an immediate return to work. That is part of the national agreement to which the unions are committed. There have been one or two slight deviations. I hope that the right hon. Lady will agree that it is important for industrial relations that signed agreements are honoured.

Mr. Robert C. Brown: Does the Secretary of State agree that the employees in the industry have behaved in an exemplary fashion since the strike began? That being so, does he agree that the Government should do their utmost to encourage the maintenance of that conduct for as long as possible? Does he agree that the Prime Minister, bedecked with diamonds, implying that they are nothing but a greedy lot of no-goods and the Secretary of State for Employment quoting a rule book when he cannot tell a rule book from a sore thumb do nothing to help to restore the normal tranquility of the industry but inflame already dangerous circumstances?

Mr. King: I do not believe that it will help if I comment on behaviour in the industry. Without question, in some areas there has been good co-operation to meet some difficult problems. In others, I have to say that behaviour has been less good. I hope that the normal processes of mediation and arbitration that are available can be put to good effect so that the public may be protected from what will otherwise become an increasingly unacceptable dispute. I understand from the evidence supplied by an opinion poll carried out by MORI for the National Water Council that the public regard the offer as fair, and think that it does not justify the type of industrial action that is now causing much hardship.

Mr. Robin Squire: In the light of the hardship that is being caused to an increasing number of people, especially the handicapped and the elderly, will my right hon. Friend say when he considers that the final stage of the procedure that is signed by all parties has been reached? Will he confirm that it was part of that procedure and understanding that, in the event of either party going to arbitration, there would be "an obligation" on the other party to respond to that request?

Mr. King: I understand that the employers have made it clear that, if the unions are unable, as they appear to be, to accept the mediator's recommendation and proceed to

the final stage because they are unable to accept the intermediate one, the employers recognise the obligation to accompany them in that reference to arbitration.

Dr. John Cunningham: Has not the country been brought to this grave circumstance first by the Government reneging on their election promise of free collective bargaining and, secondly, by the right hon. Gentleman's short-sighted and stupid attempt to try to impose a 4 per cent. ceiling on the negotiations and by the even more stupid intervention of the Secretary of State for Employment? Is the Secretary of State now saying that he will agree to the employers returning to the negotiating table to honour the commitment on comparability that was given to the water workers?

Mr. King: The hon. Gentleman has a limited knowledge of the background to the negotiations.

Dr. Cunningham: I have worked in the industry.

Mr. King: Then there is even less excuse for the hon. Gentleman knowing so little about it.
Negotiations about the upper quartile have been proceeding throughout the year. There have already been some five or six meetings about comparability. It has never been promised or conceded. The hon. Gentleman was also wrong because the employers' opening offer was 4 per cent. Because it was unacceptable they went to arbitration. Arbitration was offered on the same day because the claim was difficult. It involves both an adjustment to the annual rate of pay and a complete change in the level in the pay league. Rather than trying to recreate history incorrectly, I hope that the hon. Gentleman will address himself to the serious problem of whether the agreement that has been reached can be offered.

Mr. Peter Bottomley: Which groups of workers who would be done down if the water workers moved into the upper quartile have consented to that relative movement? Is there any explanation why the leaders of the National Union of Public Employees accepted an offer that is equal to or lower than that which has been offered to the water workers after their efforts on behalf of nurses and public sector employees in the National Health Service which had the sincere support of many hon. Members and much of the country? Has the Thames water authority given any sign whether it will repair mains bursts that occurred before the strike began?

Mr. King: I have not had any information on my hon. Friend's final point. Several mains bursts in London are being repaired. Some of that type of work is normally done by contractors and they have been carrying it out. My hon. Friend's point about the basic change in the earnings league illustrates why the mediator, who has had a better opportunity than any right hon. or hon. Member to assess the suggestion, having heard the unions put their case, was able to make no recommendation. Indeed, he specifically dismissed it. He said that, although there is a grievance about earnings, there are opportunities for earnings to be increased. The employers' point—the mediator agrees—is that increased wages must be earned and cannot be awarded out of the blue.

Mr. Sydney Bidwell: Is the Secretary of State aware that Sir Walter Dugdale, the chairman of the National Water Council, told millions of people on television during the weekend that if the


Government wanted a settlement there would be one? It is as plain as a pikestaff that the argument is about just a little more money which the Government can authorise.

Mr. King: It is not "Sir Walter"; it is "Sir William". Nor is that what he said. The fact is—and this came out as plain as a pikestaff, if I may use the hon. Member's phrase—that it is not just a little more money. There is an issue of principle, the issue of the upper quartile. That came out clearly and union members themselves made that clear.

Mr. Nicholas Winterton: I congratulate my right hon. Friend on his constructive and informative statement to the House. I share his wish that this damaging dispute should be settled quickly. Is he aware that increasing evidence is coming to the attention of hon. Members that many water workers were not in receipt of ballot papers for the votes that have taken place? Will he therefore discuss with the Secretary of State for Employment whether, far from there being jiggery-pokery on the Government's side, there is a devil of a lot of jiggery-pokery on the union side? I can quote chapter and verse if he wishes.

Mr. King: This widens the issue into areas into which I would rather not proceed today. The way in which the respective ballots, soundings or whatever have been conducted, which will have been noted by many people up and down the country, must be of continuing concern. Undoubtedly others will want to reflect on this.

Mr. Jack Ashley: As a Member sponsored by the General and Municipal, Boilermakers and Allied Trades Union, may I say that, whatever the outcome of the dispute, the way in which the Government have handled it is a clear warning that they should reconsider their whole attitude to industrial relations when it can provoke and embitter moderate and reasonable workers like the water industry workers?

Mr. King: I hope that the right hon. Gentleman will reflect on what he has said about the way in which the dispute has been handled by the Government. We have encouraged the discussions and the attempts at conciliation at ACAS. We have encouraged mediation and the appointment of an independent mediator. We have made

it clear at all times that under the national agreement arbitration is available. I should have hoped that that would have seemed to the right hon. Gentleman, with his trade union connections, an impeccable approach to a difficult industrial situation.

Mr. John Gorst: When the strike is over, will my right hon. Friend have discussions with the Secretary of State for Employment on an important matter that has been raised, namely, the necessity for alternative arrangements when strikes in essential services affect the lives or safety of the public, with a view to changing the law so that people may no longer have immunity when they put at risk lives and safety?

Mr. King: I well understand why my hon. Friend has raised that point. Every right hon. and hon. Member must be gravely concerned about the present situation, with a threat to an essential service. I regret it particularly because there is an agreement which provides for mediation and arbitration to continue. There is no good reason why normal working should not continue while these procedures go forward. It is not acceptable for the life of the country and the lot of elderly people, the sick and the handicapped to be so inconvenienced and distressed as many are.

Mr. Kaufman: Since the one thing that we are all agreed upon, including the right hon. Gentleman and myself, is that this strike is potentially of extreme gravity and must be solved honourably and reasonably on all sides, will the Secretary of State, in view of his continual commendation of the mediator's report, ask the employers to respond directly to the telex from the workers asking for further negotiations so that further negotiations may begin immediately?

Mr. King: I do not know how many times I have to repeat it, but, if the right hon. Gentleman will read the last paragraph of my statement, I hope it will be clear to him that that is precisely what the employers have offered in terms of urgent discussions. That has the full support of the Government. I shall not say any more, because I hope that the unions will shortly this afternoon be going to ACAS and that it will be possible to find some way forward in this damaging dispute.

Water Industry (Closed Shop Agreement)

Mr. Douglas Hogg: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the operation of a closed shop agreement within the water industry".
Following Labour legislation in the 1950s, the water authorities have introduced a closed shop agreement within the industry. Membership of a designated trade union has been made a condition of employment for new employees; thus, the withdrawal of a union card exposes an employee to dismissal without redress. As a result of what has been said to me over the weekend and subsequently, it is clear that a substantial number of water authority employees in my area would like to accept the mediator's award and return to work, but they fear to exercise that right because they know that if they do so there is a substantial risk that they will be dismissed without compensation.
Such a situation is an intolerable affront to the principles of natural justice for which the House stands. The House should have the opportunity to urge upon unions and employers alike the need to give a formal undertaking that they will not bring about the dismissal of any employee who chooses to return to work and accept the mediators award.
This matter is specific because, as a result of the closed shop agreement, trade union constituents of mine are being obliged to do that which they do not wish to do. The matter is urgent because, as a result of the trade union closed shop agreement, trade union constituents of mine are suffering severe financial loss. The matter is important because the trade unions, having refused the mediator's award, are subjecting my constituents to severe and prolonged hardship.

Mr. Speaker: The hon. Member for Grantham (Mr. Hogg) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the operation of a closed shop agreement within the water industry".
The House has listened with concern to what the hon. Gentleman said, as I have myself, and to the exchanges earlier. However, the House knows that under Standing order No. 9 I am directed to take into account the several factors set out in the order but to give no reason for my decision.
I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Liverpool, Wavertree (Circulation of Leaflet)

Mr. Anthony Steen: On a point of order, Mr. Speaker, I should like your guidance on a long-standing convention in the House by which Members of Parliament do not trespass on the constituencies of other Members.
In the past few days a scurrilous leaflet has been circulated in one of the wards of my constituency by the hon. Member for Liverpool, Edge Hill (Mr. Alton). Its distribution has caused considerable consternation to my constituents because it has the insignia of the House of Commons in the right-hand corner, it also has the print of the House of Commons on the right-hand side and it implies that the hon. Member for Edge Hill is servicing and representing my constituents. In the final paragraph of his leaflet he says:
Now that the Mossley Hill Liberal Association has adopted me as their Prospective Parliamentary Candidate, I look forward to extending the service to the area coming into the constituency. Please remember that if I ever can be of service to you, or if you would like to help the Liberal campaign, you shouldn't hesitate to get in touch. You can write to me at the House of Commons".
I ask for your protection, Mr. Speaker, from one Member who is trespassing into the constituency of another.

Mr. David Alton: Further to that point of order, Mr. Speaker. May I make it clear to you and the House that before issuing the leaflet I consulted my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), the chief whip of the Liberal party? He made it clear to me that a Committee of the House had considered the use of the emblem that is shown on the leaflet, which is not the insignia of the House of Commons, and found that it was in order to use it. Furthermore, I made it clear in the letter, while the Boundary Commission is still sitting, that the Mossley Hill Liberal association has just been formed, and in future I would hope for the support of the people in that area if I were ever to be chosen as a candidate there.
It is proper and in order for any person to seek selection as a prospective candidate.

Mr. Arthur Lewis: Further to that point of order, Mr. Speaker.

Mr. Speaker: Order. I shall give a ruling in a moment. I will call the hon. Gentleman.

Mr. Alton: Surely it is the right of any citizen to seek your protection, Mr. Speaker, to have the right of free speech and to make it clear that he has an alternative point of view to put to others. I do not seek to interfere in the work of the hon. Member for Liverpool, Wavertree (Mr. Steen) while the Wavertree constituency exists. I am sure that the hon. Gentleman is capable of discharging his duties in that respect. It is made clear in the leaflet that the largest component part of the new Mossley Hill constituency is my own Edge Hill costituency. That is the truth. [HON. MEMBERS: "Election expenses".] There is no question of election expenses being—[HON. MEMBERS: "Oh".] My position is identical to that of the hon. Member for Liverpool, Garston (Mr. Thornton), who was recently chosen as prospective candidate for the seat of my right hon. Friend the Member for Crosby (Mrs. Williams).

Mr. Arthur Lewis: Further to that point of order, Mr. Speaker. Will you be good enough to give long and careful consideration to this matter and not what I would term an off-the-cuff reply? There are many possible ramifications, of which you will be aware after you have considered the matter.
The hon. Gentleman said that he saw his chief whip. What that has to do with it I do not know. We have Clerks in the House who are helpful to every hon. Member, irrespective of whether he is in Government or Opposition. One should know that the Clerks should always be approached with regard to such matters. If they deem it necessary, they advise hon. Members to approach you, Mr. Speaker.
This is a serious issue because we know that there will be a number of similar happenings in the near future, when many constituencies will be amalgamated. You will not know, Mr. Speaker, what manoeuvres and manipulations are going on. I ask you to be good enough to say that you will consider the matter and come back to us with a considered reply, because otherwise there could be dangers for all hon. Members. Any prospective candidate could be affected. There are 18 in Bermondsey—[HON. MEMBERS: "Twenty-four".] I am told that there are 24. They could all use House of Commons paper and say that they are the prospective condidates for the lesbian league or the homosexual league.
I ask you, Mr. Speaker, to consider the matter carefully as there is an abuse of our conventions.

Several Hon. Members: rose—

Mr. Speaker: I shall call the hon. Member for Liverpool, Garston (Mr. Thornton), and then, with respect to others, I hope to move on. I have a statement to make that may be helpful to the House.

Mr. Malcolm Thornton: I realise that the hon. Member for Liverpool, Edge Hill (Mr. Alton) may feel that he has considerable difficulties with his alliance friends in Liverpool. I should like to make it clear that his situation is not unique. As he said, other hon. Members on both sides of the House will be faced with the problem between now, the determination of the boundaries by the Boundary Commission and the run-up to the general election, whenever it comes, of having a cross-constituency interest as a candidate. I hope that in your deliberations, Mr. Speaker, you will give guidance to hon. Members who are affected in that way as it is no wish of mine or, I hope, of any hon. Member to abuse the conventions to which we have all, or nearly all, adhered for a long time, to trespass on another right hon. or hon. Member's constituency. We would very much appreciate your guidance.

Mr. Speaker: The House largely disciplines itself on such issues. I am grateful to the hon. Member for Newham, North-West (Mr. Lewis), who came into the House on the same day as I did, which I never tire of repeating. The hon. Gentleman has a feel about these things. Obviously there will be difficulties with the changes that I understand are likely to come about.

Mr. Dennis Skinner: What?

Mr. Speaker: Apparently those changes are, coming about. Since 4 o'clock a Sub-Committee of the Select Committee on Services, to which I turn for advice on such matters, has been considering this very leaflet. I will be advised on the hon. Gentleman's point of order. I think that it goes further than the hon. Gentleman thinks. We want some guidelines for hon. Members who will be in real difficulty. Perhaps at a later date I shall make a statement to the House when I have received the distilled wisdom of the Committee and have had a conference on the matter.

Mr. Tam Dalyell: rose—

Mr. Peter Bottomley: rose—

Mr. Speaker: Order. I hope that hon. Members will not raise the same question. With respect, we could go on all day.

Mr. Peter Bottomley: I do not wish to pursue the general issue, Mr. Speaker, but will you give the hon. Member for Liverpool, Edge Hill (Mr. Alton) the opportunity of reconsidering one remark that he made about the contents of the leaflet—

Mr. Speaker: Order. We are not going into the matter any more. In view of my statement, we shall not have an exchange across the Floor.

Mr. Dalyell: rose—

Mr. Speaker: The hon. Gentleman is usually very cooperative.

Mr. Dalyell: On a different point of order, Mr. Speaker. Pursuant to a point of order yesterday on a matter of considerable substance, the right hon. Member for Plymouth, Devonport (Dr. Owen) has been accused by a former chief of the defence staff of misleading the House. Has there been any request for a personal statement to be made?

Mr. Speaker: I understand that statements have been made outside the House by the right hon. Gentleman and by the admiral concerned. Nothing except the hon. Gentleman's point of order has been said within the House.

BILL PRESENTED

HOUSE OF COMMONS (UNIVERSITY CONSTITUENCIES) (ELECTION AND RIGHTS OF MEMBERS)

Viscount Cranborne, supported by Mr. Harry Greenway, Mr. Julian Amery, Mr. Stephen Hastings, Mr. Mark Lennox-Boyd, and Mr. David Atkinson, presented a Bill to provide for the election of Members of the House of Commons by university constituencies in the United Kingdom; to prohibit reference to political affiliations on ballot papers in such elections; to uphold the independence of Members so elected; and to prohibit such Members from holding ministerial office: And the same was read the First time; and order to be read a Second time upon Friday 4 February and to be printed. [Bill 63.]

Solvent Abuse (Scotland)

Mr. David Marshall: I beg to move,
That leave be given to bring in a Bill to amend the Social Work (Scotland) Act 1968 to add solvent abuse to the conditions indicating the need for a compulsory care order.
In 1981 11 young persons died in Strathclyde as a result of solvent abuse and 1,725 young persons were found inhaling solvents, according to the official report of the chief constable for Strathclyde region. I also understand that 33 youngsters died in Britain in 1981 because of that ever-growing practice, and that 14 of those deaths were in Scotland.
Although the number of deaths is recorded, one of the difficulties in assessing the extent of the problem is that no one has any idea of the numbers of young people involved. Even the Scottish Education Department in its consultative memorandum issued in late 1981 states that the numbers of young people concerned are a matter of conjecture and that it is safe to assume that most incidents of solvent abuse go undetected.
The Bill would help inasmuch as it would enable authorities to refer youngsters to a children's panel on a first detection of abusing solvents, whereas at present they are powerless to act and often, because of that, do not do so. Apart from helping these youngsters sooner, we would be building up a record of the true extent of the problem facing us. It is a sad fact that many instances of youngsters abusing solvents are ignored because of the prevailing attitude that there is nothing that one can do about it.
Let us change all that. Let us not find reasons for doing nothing. Just for once let us take some action to help reduce the scale of this menace in present-day society. The low-key approach adopted and recommended by the Government has failed, so much so that only last week Strathclyde regional council decided to adopt a high-level attack on the problem before it reached epidemic proportions in that area.
At this stage I should like to pay tribute to Strathclyde regional council, in particular to Councillor William Perry and to Mr. Geoffrey Isles, the principal officer on addiction, and to Glasgow district council, for their respective campaigns. I pay tribute also to the Glasgow Evening Times and the Daily Record for all their efforts.
However, neither the local authorities nor the media can take the necessary action, only the Government or Parliament can. Apart from legislation, if the Government have a million pounds to spend on an advertising and publicity campaign extolling the fatal virtues of nuclear weapons, why can they not spend money on an advertising campaign similar to that mounted against smoking, warning parents and youngsters against the dangers and evils of solvent abuse?
I do not intend to describe the symptoms, causes and effects of solvent abuse. That has been done here many times. My hon. Friend, the Member for Jarrow (Mr.

Dixon) did so most graphically as recently as 21 December 1982. There is, however, an air of frustration and hopelessness in many areas and among many parents as to how to cope with the problem. Their pleas for help go largely unanswered, mainly because of the absence of any encouraging or supportive legislation. Perhaps eventually Parliament will recognise the need to clamp down hard on shopkeepers who knowingly and deliberately sell solvents to youngsters for the purpose of solvent abuse, but in the meantime we have a responsibility to do what we can to reduce the scale of the problem.
I do not seek to make solvent abuse a punitive offence. That would only drive it underground and discourage people from seeking help. I prefer to see caring legislation introduced. The Social Work (Scotland) Act 1968 came into being before solvent abuse became a problem. Section 32 (2) lays down the conditions that indicate when a child may need compulsory measures or care within the meaning of the Act and may therefore be referred to a children's panel. My Bill simply seeks to add to these a new condition—a child's indulgence in solvent abuse. My definition of the term solvent abuse is inhalation, for the purposes of intoxication or hallucination, of glue, adhesive, the contents of aerosols or any product containing volatile substances.
The children's hearing system is a uniquely Scottish one which enables the problems of a child up to the age of 16 to be discussed in the presence, and with the participation, of the parents in an informal setting. The legislation which created the children's hearing system and which governs practice within it applies, of course, only to Scotland. The Secretary of State for Scotland told me in a written reply on Thursday 16 December 1982 that he would take action along the lines I am suggesting, that this would require only a small change to the legislation and that he would seek to arrange that when a suitable opportunity arose.
Surely there is no more suitable opportunity than the present. The Bill will not eliminate the problem of solvent abuse in Scotland but, by means of a very simple addition, sooner rather than later, to the Social Work (Scotland) Act 1968 it may help to save some young people and parents untold misery, and it might even save some lives.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Marshall, Mr. Dennis Canavan, Mr. Neil Carmichael, Mr. Tom Clarke, Mr. John Come, Mr. Donald Dewar, Mr. George Foulkes, Mr. Norman Hogg, Mrs Helen McElhone, Mr. Albert McQuarrie, Mr. Michael Martin and Mr. John Maxton.

SOLVENT ABUSE (SCOTLAND)

Mr. David Marshall accordingly presented a Bill to amend the Social Work (Scotland) Act 1968 to add solvent abuse to the conditions indicating the need for a compulsory care order: And the same was read the First time; and ordered to be read a Second time upon Friday 11 February and to be printed [Bill 70.]

Transport Bill (Allocation of Time)

Ordered,
That the Report [27th January] from the Business Committee be now considered.—[Mr. Lang.]

Report considered accordingly.

Question, That this House doth agree with the Committee in their resolution, put forthwith, pursuant to Standing Order No. 43 (Business Committee) and agreed to.

Following is the report of the Business Committee:
That on the allotted day which under the Order [17th January] is to be given to the proceedings on Consideration and Third Reading those proceedings shall, subject to the provisions of that Order, be brought to a conclusion as follows:


Proceedings
Time for conclusion of proceedings


Consideration
Half-past Eleven o'clock


Third Reading
One hour after midnight

Orders of the Day — Transport Bill

[ALLOTTED DAY]

As amended (in the Standing Committee), considered.

New Clause 1

PAYMENT OF REVENUE GRANTS

'Without prejudice to any other powers under which an authority may make grants to an Executive, the power to make revenue grants in pursuance of this Act shall, if exercised for the purpose of implementing proposals approved under the preceding section above, be regarded for all purposes as being properly exercised.'.—[Mr. Booth.]

Brought up, and read the First Time.

Mr. Albert Booth: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it will be convenient to take amendment No. 25, in clause 5, page 5, line 14 leave out subsection (1) and insert
(1) An Authority may in any year increase the amount of any revenue grant determined under section 4(1) above at such time or times as they think fit having regard to their duties under this Act and the Act of 1968 or the Act of 1969'.

Mr. Booth: The purpose of the new clause is to create a clear legal right of passenger transport authorities to pay revenue grants to their passenger transport executives. This right will apply to any revenue grants made for the purpose of implementing proposals to carry out the transport plans which the passenger transport authorities have to approve under the provisions of clause 4.
The Bill was introduced in an atmosphere of considerable concern about the legal position of local authorities in the metropolitan areas and the GLC in respect of their payments under transport policy. The situation had developed largely from a decision in the other place which held, in Bromley v the GLC, that the GLC did not have the legal right to pursue a transport policy on which it had campaigned, on which it had been returned to office and which, at the time of the campaign, although it had been a matter of considerable controversy with regard to its political merit, had given rise to no suspicion that it was illegal. It was considered to be a proper matter for democratic decision-making.
In introducing the Bill, which is now at its Report stage the Secretary of State claimed that one of the merits of the measure was that it clarified the legal position. In Committee we showed beyond reasonable doubt that, far from clarifying the position, it created an area of grave doubt even where hitherto there had been some certainty. For example, by repealing section 15(3) of the Transport Act 1968 we shall remove a clear statement defining an area in which public transport authorities can issue instructions to their passenger transport executives on the policies to be carried out in the expenditure of money provided by the authority. The Bill is therefore bringing into question the democratic role of metropolitan authorities and of the GLC in the determination of transport policy. It is undermining the judgment of Mr.


Justice Woolf, who clearly set out the basis on which metropolitan authorities work in relation to their legal powers.
4.30 pm
Clause 5 provides legal protection only up to a level of expenditure that is to be specified by the Secretary of State in guidance that he will issue to the passenger transport authority. He also issues advice and guidance to passenger transport executives. If the Bill intends to deal with the legality of expenditure by transport passenger authorities in pursuit of their policies, it must be clear about the area in which those authorities can properly make expenditure decisions.
Clause 5 thoroughly muddies the water and leaves the gravest possible area of doubt by saying that expenditure up to a particular level, which will be specified in guidance from the Secretary of State, represents a proper use of power and by failing to say that expenditure above that level is illegal. On the contrary, it leaves the whole issue to be determined by the courts. It makes nonsense of the English language if "guidance" is intended to mean an absolute determination of what constitutes legal expenditure. That is tantamount to saying that the Secretary of State will issue an edict on what public transport authorities can spend.
If all the areas of revenue grant expenditure that might fall outwith the figure specified in the Secretary of State's guidance are left to the decision of the court and in doubt, the Bill cannot, by any stretch of the imagination, be said to be clarifying the law. On the contrary, it is creating the gravest doubt.
Clause 5 evades the important issue of what metropolitan or GLC public transport expenditure is legal. It leaves it to the courts to determine whether revenue grants in excess of the public expenditure limit in the guidance are legal. As a result, a passenger transport authority can discharge an electoral mandate that involves revenue grant expenditure above the limit set subsequently by the Secretary of State only at the risk of subjecting its members to surcharge and bankruptcy. That is wrong, and that is why new clause 1 is needed.
If the Bill is placed on the statute book in its present form, it will add to the need for further legislation to clarify which transport policy decisions are to be made by local government and which by national Government. The Bill is unclear about what will be decided nationally and what will be decided locally, and it is also unclear about what the courts will decide when the first cases are brought on the meaning of clause 5(2). If the Bill is enacted, legislation will have to be introduced to clarify which areas are the responsibility of the metropolitan authorities or the GLC, when they should decide revenue expenditure and when the level should be determined by the Secretary of State for Transport.

Mr. Peter Griffiths: Notwithstanding the right hon. Gentleman's comments about an element of doubt remaining over spending above the protected expenditure level, does he agree that those transport authorities that choose not to exceed that level no longer face the uncertainty of the past?

Mr. Booth: Unfortunately, I cannot even agree to that proposition. Even in the area that deals with revenue

grants that total less than the public expenditure level that is defined in the Secretary of State's guidance, rate payments could be involved that breach the legislative requirement of the Secretary of State for the Environment under the Local Government (Miscellaneous Provisions) Act 1982. The local authority might still be involved in a loss of revenue support grant and, given the logic of the decision by some of the Law Lords in Bromley v the GLC, it will be subject to actions for a breach of fiduciary duty. Unfortunately, there is not even any certainty that if expenditure is kept within the limits, local authorities will stay out of the courts.
In some ways, that intervention has underlined my contention that the law should be clear about which decisions can be taken by local government without legal challenge and which decisions are for the Government to take. Once we have that legislation on the statute book we can legislate to remove any possibility of surcharge on and disqualification of those who take decisions in local government properly, with the exception of acts of wilful financial negligence or corruption. The Bill does not give those in local authorities any scope to proceed on that clear understanding. If new clause 1 and amendment No. 25 were accepted, local authority transport policy could be significantly clarified.
I draw the attention of hon. Members to amendment No. 25. The Bill provides for public transport authorities to make only one determination each year, in accordance with the planning procedure in the Bill. That planning procedure is such that the determination will have to be made at the beginning of each financial year. Therefore, it can be made only in the light of the circumstances obtaining at the time, together with any reasonably foreseeable circumstances.
The pattern of our national economy is such that within any one financial year there could be various changes which would mean that the provision made by way of revenue grant was insufficient to carry out the policy. In recent years there have been increases in the price of fuel, instances of major industrial action and other events which could easily disrupt the most carefully thought out passenger transport authority's three-year plan. Therefore, the authority might well find it necessary in the course of the financial year to inject a further subsidy into the passenger transport executive undertaking to stabilise and protect the level of service planned.
Unless the Bill permits the passenger transport authority to increase its determination, the executive will be at the mercy of unforeseen events and, as a result, will be unable to carry out its services with the revenue grants provided. The Government and Conservative Members pride themselves on understanding, and being sympathetic towards, the problems of business men. Surely none of them would claim that any business would so restrict its own financial scope as to prevent its taking money from reserves or making some other provision to deal with an unforeseen call upon the financial provision that it has made for that year of operation.

Mr. Reg Race: I do not know whether my right hon. Friend had the opportunity to see Sir Freddie Laker on television last night, when he was chastised by the Nationwide team for his activities during his previous incarnation with Laker Airways. Sir Freddie said that avoidance of amounts due to creditors was simply part of free enterprise. My right hon. Friend's comments about


the role of business men are apposite because, if they run into difficulties with creditors and overdraw their facilities, they do not pay their creditors, whereas public transport undertakings are now being told that they must eliminate all deficits within a specified period.

Mr. Booth: I do not have the advantage of having seen the programme to which my hon. Friend refers, but the case is of a man who, in his business arrangement with Laker Airways, guarded himself against many creditors' claims. I hope that no hon. Member will advocate that such arrangements should apply to public life. They should certainly not apply to financial agreements between passenger transport authorities and passenger transport executives.
If an executive were protected in such a way that creditors were unable to secure repayment, Conservative Members would consider that improper. All that we are asking for in the amendment is that if circumstances arise which, in the best judgment of the PTA—on having been called upon even by a PTE—requires it to make an adjustment to the grant for the year, that the PTA should be able to do so.
It is not only unreasonable, but uneconomic, to argue in the way that the Secretary of State did in Committee and say that if the problem arose all that would be necessary would be for borrowing to take place. If the PTE—or, for that matter, the PTA—found itself in that circumstance and said that it wished to borrow to cover itself against unforeseen circumstances, it would be doing so at a time of national economic difficulty, when interest rates were rising. In any case, the borrowing would only add to the financial burden of the authority in having to clear the debt.
The amendment accepts that a PTA or the GLC must operate within the conditions imposed by the Transport Act 1968 and the Transport (London) Act 1969 and that if in the course of the year it runs up against an unforeseen call for finances to carry out its transport policies it can develop a further grant arrangement.
There is no suggestion in amendment No. 25 that, in considering any further grant made during the year, all of those considerations that were proper at the time of the original determination should be set aside. Far from doing that, the amendment makes it clear that any further grant is subject to those broad conditions. However, given that qualification, if we are to try to draw some sensible transport planning out of the Bill's provisions, it is necessary that it should allow for such a contingency. Those are the aims of the new clause and the amendment.

Mr. Harry Cowans: The Government claim to have business acumen. Is it not nonsense to force a local authority to borrow regardless of the market and regardless of whether it has funds which it would be more beneficial to transfer? All that the Secretary of State has said is that the authorities should borrow. The financial flexibility under the Bill, without the new clause, is restrictive. It is nonsense for the Government to claim that they are looking after the ratepayers when they force a local authority to borrow, even if such borrowing is not necessary because the local authority already has the funds available.

Mr. Booth: I agree wih my hon. Friend. It makes nonsense to force the authorities to borrow in those circumstances and it creates a great inconsistency in the

way in which deficits must be dealt with under the financial duties of the PTE under clause 2. The borrowing will cause a deficit to arise, which presumably will fall to be considered under the deficit procedures at the end of the financial year, without any of the normal financial safeguards or financial alternatives for dealing with the problem being available to the authority at the time when the problem first arose.
I hope that both the new clause and the amendment will commend themselves to the House. We look forward with interest to hearing what Conservative Members consider to be the merits of leaving the Bill in its present form. If they cannot put up any arguments to suggest that the Bill would be better without the new clause, we look forward to their support in the Lobby.

The Secretary of State for Transport (Mr. David Howell): It may be of help to the House if I respond to the opening remarks of the right hon. Member for Barrow-in-Furness (Mr. Booth). He touched upon some of the fundamental purposes and aspects of the legislation. I agreed with some of his preliminary remarks. He began by saying that the Bill was introduced in an atmosphere of considerable anxiety about the legal rights to subsidise the metropolitan counties and the GLC. That is correct. There has been much anxiety about the legal ambiguities and the legislative position governing the payment of subsidy for public transport operations.
I take it from what the right hon. Gentleman said that we are agreed that, although it has been challenged by others, there was and is a need for legislation to secure a stable and clear basis for the payment of subsidy for public transport operations. That is recognised, and that is why this Government have introduced the Bill.
The right hon. Gentleman spoke about the judgment by Mr. Justice Woolf in the Merseyside case. The right hon. Gentleman is right in saying that judgment was given, although the case did not go to appeal. However, in the West Midlands authority case last year, when the metropolitan authority was legally challenged, it felt constrained to increase its fares. There has been other talk of legal ambiguity. There are still doubts about the legal position despite the recent case involving the GLC. The judgment was one of a long series of legal happenings on this issue.
More than that, the bids for support for local public transport operations that the metropolitan authorities and the GLC are contemplating for next year, are such a quantum leap in expenditure that it is highly likely, even on the most prudent assessment, that new legal challenges and difficulties will arise. We are talking about a possible increase of between 75 and 100 per cent. between 1982–83 and 1983–84.
Against that background, and even if we put aside the right hon. Gentleman's point about the considerable anxiety about the legal position, it would be folly not to bring forward legislation now to create the stability and clarity that is needed.
There is an argument whether the proposed legislation establishes what the Opposition believe is needed.

Mr. Kenneth Marks: The Minister agreed with my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) that there was cause for concern about Greater London. The metropolitan counties


have always agreed with that. He tried to extend that concern to apply to the metropolitan counties, but it does not apply to them. I am not sure that it applies even to Greater London since last week's judgment. The Minister did not give the real reason for the Bill—it is not the uncertainty about the legal position, but that he thought that the metropolitan counties would go too far in subsidising transport.

Mr. Howell: The right hon. Member for Barrow-in-Furness said "and the metropolitan counties". The hon. Gentleman can check Hansard tomorrow. The reason belongs in the past, the present and the future. It would be imprudent to ignore the probable developments that are already written in the figures before us. If there is a liklihood of further legal challenge, that is as serious a consideration as the fact that there have been legal ambiguities in the past.

Mr. Booth: The Minister has quoted me correctly by saying that the Bill was introduced at a time of concern about the legal rights of the metropolitan authorities, as well as those of the GLC. However, he is not entitled to deduce from that that I think that that concern can be met by the Bill. On Second Reading—I said that the Bill would not make a sensible contribution towards dealing with the concern of metropolitan authorities.

Mr. Howell: That is so. The right hon. Gentleman's amendment challenges the main purposes of the Bill. The Opposition and the Government disagree about the legislation that is needed. It has been the contention of Opposition Members, repeated by the right hon. Gentleman, and embodied in the new clause, that the Bill—which we believe to be necessary and desirable to create the clarity and stability that have been, still are and will be lacking—somehow undermines democracy and fails to provide the stability and clarity that is required.
The facts are quite different. The legislation will protect expenditure by metropolitan transport authorities up to a specified level. Within that level, there is extensive legal protection and legal certainty. The right hon. Gentleman cast doubt on the degree of legal certainty, even within the protected expenditure levels. Whatever the circumstances under rate support grant, clause 5(2) makes expenditure within the specified level a proper exercise of an authority's powers. It is, therefore, legally protected within the protected expenditure level. There is no doubt that that is a proper exercise of local authority power.
The Opposition's quarrel with the Government is that the Bill does not give unfettered power, as the new clause would. The clause would give unfettered power to local authorities so that expenditure at any level, rather than expenditure up to a specified level, for which provisional figures have been put forward would be legally protected. Obviously, they remain provisional until the Bill becomes law.
The quarrel is that above that protected expenditure level, expenditure by a local authority might still be exposed to ratepayer challenge, which the Opposition believe to be a terrible thing. Does the right hon. Gentleman want cash limits to be imposed by central Government? I have heard it suggested that that would be desirable. The Government do not believe that cash limits would be the right way to handle the matter. It would be

a far greater intrusion into the control of local transport undertakings and activities than the Government or anyone else desire. The Government have not adopted cash limits as a course, and I do not think that the right hon. Gentleman really wants that course. What does he want? The answer is explained in the new clause. He wants unfettered rights for authorities to spend. He wants them to be free to decide how much ratepayers' money should be spent on transport subsidies. If he wants that, he must also believe—this is the heart of the matter, and I must throw doubt on his belief—that if there were unfettered spending all ratepayers providing the money for that spending would be protected by local democracy, which he claims is under attack.

Mr. Robert Hughes: Does not the Minister think that it would be better for the elected members of local authorities to decide how much money should be spent, rather than unelected judges who, under the Bill, would decide how much should be spent? Is not the Minister guilty of using the courts as a political agent for his policy?

Mr. Howell: I must ask the hon. Gentleman to think about the matter again. He obviously believes that all ratepayers vote, but that is not the case. Less than half the rates are raised by those who vote in the local democratic processes. More than half of them, are raised from commerce and business, where there is no vote. The right hon. Member for Barrow-in-Furness is suggesting that not only should we abolish the rights of all ratepayers to challenge expenditure above the protected level, which the Government have provided for the sake of stability and clarity in transport matters, but that we should remove all rights for ratepayers—the majority of whom do not have a vote and are, therefore, not directly protected by the local democratic elections—to have recourse to the courts at any level of expenditure, which should be unfettered. The Government believe that it is wholly wrong to remove that protection. A far better balance will be secured by the protected expenditure level within which an authority can proceed, comforted by the fact that, under clause 5(2) it is regarded as a proper exercise of their powers.
Of course local authorities are free to go beyond the protected level of expenditure, but in doing so there is the possibility of a ratepayers' challenge. Opposition Members want that right to be removed, regardless of whether the ratepayers have the right to vote.

Mr. Cowans: The Minister has misread the new clause. It seeks only the power to implement the proposals that have already been agreed. He cited clause 5 as a protective clause, but it does not protect the present position. Under subsection (2), the exercise of power relates only to spending within the guidelines.
New clause 1 takes account of that, but allows for flexibility—if something happens to cause a deficit—for local authorities to make an additional revenue grant within the guidelines of the previous proposals, without having to resort to borrowing. That is exactly what the Opposition are seeking.

Mr. Howell: The hon. Gentleman is referring to matters that are more specifically addressed by amendment No. 25. The effect of the new clause would be to remove all fetters on the level of subsidy that a local authority could pay. The Government have made it


absolutely clear—they are not alone in their view—that there should not be an unfettered power because there are large numbers of contributors through the rates who do not have the vote. The Select Committee also thought it wrong, saying in its fourth report:
within the expenditure constraints which local authorities now face, we believe that the Government is right to seek some reduction from the levels of public transport revenue support which occurred last year".
I believe that the hon. Gentleman is a member of the Select Committee, so he must believe that, as do the Government. That is reflected in our approach to the legislation.
I turn to the more specific point whether during the year there should be powers to increase the grant in the face of unforeseen circumstances. The essence of our approach and the strong belief of the Government is that sensible financial disciplines require a single determination of grant to be made. We believe that it is poor financial practice for there then to be loopholes and escape valves through which further grant can be paid in certain circumstances. It is much better that that matter should be corrected, if unforeseen circumstances arise, by borrowing in the current year and the deficit or borrowing taken account of in setting the level of grant and, of course, the protected expenditure level for the following year. We believe that if a proper plan is made for calling upon reserves, reserves are available, but that if no proper plans are made there should not be a haphazard calling on reserves. Sensible financial practice demands that a determination be made each year. If special circumstances arise they should be met by borrowing in that year with the problem put right in the following year. That is an orderly and businesslike way of proceeding.
Amendment No. 25 would, in our view, undermine that businesslike way of proceeding. I ask the right hon. Gentleman to withdraw that amendment as well.

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Mr. Race: I wish to refer the Secretary of State to several important considerations in new clause 1. The clause strikes at the heart of the Government's proposals. The Opposition are saying that the determination of transport policy should be in the hands of elected people and not in the hands of unelected and unaccountable people in the courts—the judges who are responsible to no one but themselves and perhaps, at times, to their own rather strange views.

Mr. Arthur Lewis: rose—

Mr. Race: I shall gladly give way to my hon. Friend in a moment if he will allow me to develop my point. I think that he might agree with me once I have developed it.
Our proposition in new clause 1 is that we do not want local transport undertakings to face the threat of serious legal challenge if they spend money beyond the so-called protected expenditure levels. It is crucial that local transport undertakings should have that power. One of our major criticisms of the Secretary of State's position is that, by his actions in the Bill, he is encouraging ratepayers to take legal action against duly elected local transport authorities. Therefore we say that new clause 1 is crucial if local transport undertakings, elected by the people and accountable to them through the process of election, are to be able to carry through in a reasonable way the policies on which they were elected.
I should like to refer to the way in which the balance between Parliament and the courts should be struck. Obviously, there will be occasions on which judges and the courts will have to intervene to determine precisely where Parliament's intentions lay in particular legislation. Sometimes the merit of an Act of Parliament or its meaning in changed circumstances is not clear. The courts cannot make political decisions because they are not empowered to do so. We have a system not of divided political responsibility, as in the United States, but of interlocking responsibility, and the court's responsibility is to determine Parliament's intention. The court's duty is not to determine what the transport policy for a particular area should be—at least that is my view, although I am not sure that it is the Secretary of State's view.

Mr. Robert Hughes: I am sorry to interrupt my hon. Friend. I think that, inadvertently, he is putting the point in the wrong way. It is not the court's responsibility to carry out the intentions of Parliament. If it were, we would not be grumbling. My complaint is that the judges look at the face of the Act no matter how ridiculous and contrary to Parliament's intentions their conclusion may be, which is why we had the ridiculous decision on the GLC.

Mr. Race: I hate to disagree with my hon. Friend, but I shall in a moment quote Lord Justice Kerr in the case of the London Transport Executive v. the GLC, the proceedings of which we have just received. It is an important point because it appears to me that the courts are interpreting their function in a way quite different from that in which most right hon. and hon. Members view their role. It is important to consider what the courts are up to.

Mr. Arthur Lewis: rose—

Mr. Race: I shall allow my hon. Friend to intervene in a moment.
The courts are not qualified to make judgments about the type of transport policy that a local authority should introduce. They have no information, and they do not want information, about public transport and how it affects the unemployed, women or people who do not have access to private transport. Therefore, they cannot possibly make judgments about whether a particular transport policy is reasonable or justified.
After the Bill is enacted, the courts will be faced wth a ratepayer saying, "I do not think that the balance between the ratepayer and the user of public transport has been properly set by the elected local authority." The courts will then be roped into making a judgment about that balance. That is precisely what Lord Justice Kerr said on 27 January in his comments in the judgment of London Transport Executive v GLC. On page 10 of his remarks, referring to the proper exercise of powers contained in legislation, he said:
the local authority may not strike an unfair balance between passengers and ratepayers. Subject to the true construction of the 1969 Act, as interpreted in the Bromley case and discussed hereafter, the place where this balance is to be struck is a matter for the discretion of the Council as the authority charged with the implementation of the Act. But if the balance is arbitrary or clearly unfair, then it will be invalid under the Wednesbury principle, and indeed ultra vires and it will then be the duty of the courts so to hold.
So, even if the local transport undertaking is elected on a policy and even if it considers carefully the implementation of that policy, if someone says, "I am terribly sorry but I do not think that the balance between the ratepayer


and the user of public transport is right," the courts can rule that that local authority's decision, whatever it is, is ultra vires—outside the powers of legislation passed by Parliament.

Mr. Peter Griffiths: Does the hon. Gentleman agree that the courts, in addition to deciding matters of legislation, are also concerned with natural justice? Is that not a long-term principle of our law?

Mr. Race: The hon. Gentleman may well be right, but that question has not been raised in any of the judgments that I have seen in relation to public transport undertakings. It does not seem to be one that has exercised the courts. The courts have been saying that, no matter what the policy on which a local authority was elected, no matter what consideration was given to that policy by the elected councillors, and no matter how careful they had been, should someone allege that they cannot make that judgment because it strikes an unfair balance between the ratepayer and the user of public transport, and should that allegation be believed by the court, the court will say that the decision was ultra vires.
I submit that the courts will therefore be making a political judgment about what is the proper balance between ratepayers and users of public transport. They are not qualified to make that judgment. No information is given to the courts about the way in which public transport is used by the unemployed, by women, by school leavers or by people without access to private transport. The argument that unelected and unaccountable judges can make this kind of decision seems absurd.

Mr. David Howell: Does the hon. Gentleman's view extend to the point that courts should not judge upon whether an authority has transgressed or exceeded its statutory powers?

Mr. Race: I am saying that the courts have decided, on the principles set by the House of Lords in the Wednesbury case, that there is a balance to be struck between ratepayers and users of public transport. That seems to be a principle that will inform all their actions over the next few months. It is important that people who elect local councillors on a particular policy should know that this is what will happen unless the Bill is changed. We are saying in the new clause that we do not want the courts making this kind of judgment. They are not qualified to make such judgments.
We must protect the rights not only of local authority councillors but of the electorate. One has only to recollect how the whole concept of fiduciary duty and the duty to ratepayers was erected in the first place to understand what the issue is all about. The concept sprang out of the dispute in Poplar in the 1920s when the Labour-controlled borough council decided to pay its work force equal pay. This was challenged by ratepayers as being an unfair use of public funds. The courts invented the concept of fiduciary duty to ensure that this principle could not be established by a Labour-controlled local authority.
Under the Bill the courts will determine, in the political and economic climate of the time, the extent to which a local authority can carry out its manifesto. I suspect that there will be a great difference in the view of the courts about what is appropriate and right as between a time of

economic growth when central Government are willing to pump money into local authorities, and during a period of more restrictive and monetarist approach by central Government. It will not be an objective view of reality. It will be not only the individual views of judges but a reflection of the prevailing political climate in national political life. I believe that new clause is crucial and that the House should pass it.
The Secretary of State, in resisting the new clause, is trying to invent further powers for unelected people and is trying to increase his powers to restrict the rights of local authority councillors. I hope that those Conservative Members who have expressed some interest in the rights of elected local authority councillors will vote for it.

Mr. Peter Griffiths: I trust that my right hon. Friend the Secretary of State will not weaken in his determination to resist the new clause and amendment No. 25. Throughout the discussions in Committee, and again this afternoon, attention has been drawn to the importance of maintaining a balance between the rights and duties of the transport authority, elected by the people locally, which enjoys the franchise but which produces less than half of the total funds that may be available to be spent within the local area and also less than half of the funds that are raised within the local authority area.
There is also the need for some other authority to represent the interests of those who do not have the local franchise but who are nevertheless called upon to pay a large proportion of the funds that are expended by the authority in any of its duties—in this case as a transport authority in a metropolitan county. Under our constitutional arrangements, that duty must fall to the Government. It is not a matter of the political complexion of the Government. It is the role of the Government to represent the interests of the people at large. Overall, there is the concept that if a transport authority is acting in any way that appears to a certain group of ratepayers, local business men or those who are contributing to the funds locally to be exceeding the powers granted by Parliament, such action is open to challenge in the courts.
I take strong exception to some of the comments about the role of the courts in reaching decisions in areas that are not to be properly appropriated either by the Secretary of State or by the local transport authority. The courts do not make, and never have made, decisions on the merits of political policy. It would be wrong and intolerable if they were to do so. What they have to decide is whether a policy, no matter what its merits, is sanctioned by the law as it stands at a particular time. If it does not, they will have to declare that it is outside the powers of the authority until such time as the law is changed. It is that balance involving the courts, the Secretary of State and the local authority that is the nub of the argument.
I see amendment No. 25 as a more extreme form of the same concept embodied in the new clause. One can therefore deal with them together.

Miss Joan Maynard: The hon. Gentleman reiterates the point about the unfettered right of the local authority to levy subsidy from the rates to transport. That is not correct. The local councillors are subject to election. The hon. Gentleman argues that some of the people who have to pay these rates are not represented. He refers, in some cases, to the owners of


industries. I should point out to the hon. Gentleman that the managers and workers, in general, in those industries, live within the ratepaying area. They are just as concerned about the validity of the industry and its ability to continue in business as are the owners. Their jobs are at stake. Despite the fact that they continue to vote for the transport policies of local authorities such as South Yorkshire, the Government, through the Secretary of State, are saying that if the electors of South Yorkshire persist in a policy which the Government do not like, they will lay down guidelines to bring in the courts.
The hon. Gentleman says that the courts are not being asked to make political judgments, but, as my hon. Friend the Member for Wood Green (Mr. Race) has just said, that is exactly what they are doing. They say that they are taking into consideration the balance between the ratepayer and the transport user, which must be correct. It must be a political judgment.

Mr. Griffiths: I am grateful to the hon. Lady for the reiteration of her views on this matter. I agree that the transport authority—the metropolitan county council—has a perfect right to put forward a policy on behalf of those who elected it. I suggest that there is a need to protect the rights and interests of those who will provide the majority of the cash but who do not have the right to make that decision. It is something that needs to be placed, on occasions, outside the local authority's control.
The word "unfettered" has been used. I am opposed to the unfettered use by local authorities of what they believe to be a political mandate if that mandate works against the principle of natural justice, as I pointed out during my intervention in the speech of the hon. Member for Wood Green (Mr. Race). Strong political views can be held and translated into political policies that are against the principles of natural justice. That needs safeguarding.
I do not want to be diverted from the new clause and the amendment, because I should like to draw attention to the dangerous possibilities included in amendment No. 25. It does not suggest that there might be special circumstances in which it will be necessary to increase the amount of revenue grant in a year. The amendment provides:
an Authority may in any year increase the amount of any revenue grant determined under section 4(1) above at such time or times as they think fit having regard to their duties".
If that amendment were passed, the authority would have the right to determine the amount of grant payable.
It would be possible for local authorities virtually to disregard the level established by the protected expenditure level at the beginning of the year, because they would be able to say, "We have run out of money. There have been particular problems, so we need to increase the amount of grant." They would be able to say that, not once because there was a bad winter or something similar, but because there were political reasons for increasing the amount of grant made available.
That is what the Bill seeks to avoid, and that is why the new clause and the amendment are directly opposed to the principle of the Bill, which is that there should be a balance and protection for local authorities. If the clause and the amendment are passed we shall lose the balance and the real purpose and thrust of the Bill, and I fear that that is the true purpose of the Opposition's proposals.

Mr. Marks: To suggest that authorities will be unfettered if the new clause is passed is absolute nonsense,

and I am sure that the hon. Member for Portsmouth, North (Mr. Griffiths) knows it. Why does a party which has been saying for the past nine years that it will abolish rates dislike ratepayers so much that it opposes our views?
On Friday I received the first 10,000 signatures on a petition from the Greater Manchester area where people are anxious that the Bill could result in poorer public transport for Greater Manchester through higher fares, cuts in services and the threat to children's cheaper fares. They ask Parliament to reject the Bill so that decisions on fare levels can continue to be made locally without directions or guidance from Whitehall. In a letter commenting upon what had happened in Greater Manchester the Minister said that he deplored the spending of ratepayers' money on paid advertising. I look forward to seeing his signature on some of the letters that will go to the Secretary of State for Defence.
We were told on Second Reading and in Committee that the purpose of the Bill was clarification. We have had 100 hours or more of debate in Committee and the water has been muddied considerably by the Bill. It virtually gives the Secretary of State the right to dictate to metropolitan county councils and the Greater London council how they should run their passenger transport systems and by how much they should help those systems from their own finances. It is the Secretary of State's intention to place more fetters on local authorities.
In Committee the Under-Secretary of State said that the powers of local authorities have not been reduced. Of course they have, and the Secretary of State confirmed today that that is the purpose of the legislation. Whit will happen? The Secretary of State will give advice to passenger transport executives. They will prepare a plan. The Secretary of State will then give some more advice to them and to the county council. The county council will then make a determination and that will go to the Secretary of State. He will advise them to think again, and at the same time he will make a grant. It is his business to make a grant, as he has in the past.
There will be a threat to local councillors that there will be legal action, and the Conservative party will inspire that legal action, as it has in the past. It inspired legal action against Labour Governments and education authorities when the Prime Minister was the spokesman on education.

Mr. Stanley Cohen: The Secretary of State referred to restraint on local authorities. Does my hon. Friend agree that we should insist on some clarification of that point? Who imposes the restraint and why?

Mr. Marks: I hope that we shall receive that clarification. There is a great deal of restraint placed on local authorities. There is restraint by the electors and domestic ratepayers who do not like paying rates any more than business ratepayers. Local authorities have been restrained by the courts already and a number of other restraints exist.
Whatever the views of the hon. Member for Portsmouth, North, our proposal gives local authorities the last word. That was the expression used by the Under-Secretary of State in Committee. Having listened to what the Secretary of State has said, I hope that the new clause and the amendment will be supported by both sides of the House.

Mr. Peter Fry: Judging by the speech of the hon. Member for Wood Green (Mr. Race) and the intervention of the hon. Member for Aberdeen, North (Mr. Hughes), the Opposition seem to feel that once elected a local council can do what it likes. That is not the kind of democracy that I understand or the way in which Government in this country should work. Surely there must be some constraints. A Government came to power 50 years ago in another country through its proper electoral system. There were not enough checks and balances in that country's constitution, Nazi Germany followed and Hitler came to power with all that happened. As my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) has pointed out, a proper constitutional system should contain checks and balances.
Some local authorities have a degree of unbridled arrogance once they are elected. It applies to both sides of the political divide. The longer they stay in power, the longer they think that they always know best, although they are generally elected by a minority of the electorate.
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The basic point is whether this new clause is intended to destroy the purpose of the Bill. Presumably, if a local authority calmly consideres the advice that my right hon. Friend may tender and says, "We do not care what you say because we are going to do what we wanted to do in the first place," the whole exercise is pointless. I appreciate the honest desire of many Opposition Members to preserve for local government much discretion and decision-making in public transport matters. I accept that local people must and should have a great say in the public transport policy in their area. I take that for granted.
However, the trouble is that if one always leaves it to the local passengers, they would never want fare increases. They would always want the fares to remain at rock bottom. In major cities, where for many years there has been tremendous resistance to fare increases, there is usually a great shortage of capital investment. That has been true of Greater London for many years, and it is even more true of New York where there is such great resistance to fare increases that, to our eyes, its public transport system is antiquated. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) knows that perfectly well. One cannot leave the decisions to those who wish to pay low fares and who are not worried about the overall considerations of public transport and the enormous amounts of money that are required today to keep it going.
I have some sympathy with the new clause because I believe that the Bill has introduced another element of uncertainty, although it tries to remove uncertainty. The reason for that is shown clearly in clause 4, which precedes clause 5 where the new clause is to be inserted. Clause 4 provides:
The matters by reference to which the guidance of the Secretary of State … may be given shall include—
(a) what appears to him to be the appropriate national level of expenditure by Authorities on revenue grants.
That may sound fine, but what does it mean? Does it mean, for example, that there should be a notional national level? Is it the same as for British Rail, where 40 per cent. of fares are subsidised by the public service obligation? We do not know. Will there be differences between one metropolitan county and another, for example, between the GLC and south Yorkshire?
I shall, of course, support my right hon. Friend in the Lobby, but he must spell out much more clearly his public

transport policy. He must tell not only the metropolitan counties but the shire counties what support he believes is reasonable from public funds to run public transport.
My right hon. Friend knows full well that on Second Reading I took some time to put forward the view, which I share with several others who have an interest in public transport, that there is a need for a fixed percentage from the fare box. If my right hon. Friend believes—I presume that he does because it is included in the Bill—that there is an appropriate national level of expenditure by authorities on revenue grants, will he consider being more explicit or at least give a broad guideline to every local authority and public transport undertaking in Britain?
There is gross unfairness between one county and another. We are all familiar with the tremendous problems of cheap television licences, and many of us believe that the cheap licence for those who live in warden-controlled accommodation should not have been granted because other old age pensioners rightly object and ask why they should not have it as well. The same is true of retirement pensioner concessionary fares. Every hon. Member must at some time receive letters from constituents asking why they cannot have a scheme similar to that operated by the district council or the metropolitan county next door. The position is most unsatisfactory.
That is not a public transport issue, but it relates to public expenditure and to how far one considers public transport as a necessary social service. As there has been a lack of an overall national transport policy and the means to support it, we have reached the position today where some local authorities, rightly or wrongly, have decided to invest far more heavily in subsidising fares than others. That is not the fault of those local authorities, because hitherto they have felt fully justified in subsidising public transport. The difference has tended to be political, but not entirely. Lancashire county council has a good record of supporting public transport and it invests much money in helping public transport.

Mr. Marks: Does the hon. Gentleman realise that all the shire counties receive grant under the transport supplementary grant on the understanding that they give concessionary fares? Some of them do not do that but use it to keep down the rates.

Mr. Fry: This is not the place to discuss the intricacies of the transport supplementary grant. The hon. Gentleman knows my view about the TSG—that it should be much more specific. The way that it has been drawn up hitherto is most unsatisfactory, but that is a subject for another debate.
My right hon. Friend must put some flesh on the bones of the phrase that I quoted from clause 4. If a national figure must be considered, he should make it clear and, if the Bill is to be successful, he must do it fairly rapidly.
We are only at the start of even greater Government involvement in the entire public transport and local government scene. One cannot tackle the metropolitan counties and leave all district council undertakings completely on one side. Sooner or later one is bound to be brought into the argument whether a district council should be allowed to subsidise its ratepayers to the extent that a metropolitan county can do so. If we are bringing in legislation to control the worst spenders, my right hon. Friend must investigate how many district councils support public transport. He will find that district councils support


public transport in many ways, some of them most mysterious. The danger is that the Government are being led into a quagmire, so the sooner that my right hon. Friend sets down clear national guidelines, the easier it will be to take on the difficult task of imposing a national policy on the many different policies undertaken by local authorities.
I shall support my right hon. Friend tonight, as I supported him on Second Reading, but I hope that he has taken note of some of the warning notes that I have sounded this evening.

Mrs. Jill Knight: The new clause speaks of the power to make revenue grants being properly exercised. It is extremely important to bring to the attention of the House one local authority which is certainly not exercising its rights in a proper and correct way. That, I am sorry to say, is the West Midlands county council, which has spent about £70,000 on a campaign against the Bill. [HON. MEMBERS: "Hear, hear."] Opposition Members say, "Hear, hear." I wonder how many people who are paying the £70,000 agree with that expenditure.

Mr. William Wilson: As one of the ratepayers of the West Midlands county council, I can say that one hon. Member in the House supports it.

Mrs. Knight: It is a poor show indeed if only one of the Members who is a ratepayer of the West Midlands county council supports it. Fortunately it can be said of the hon. Gentleman that he can afford to support a grant of this nature, but it is wrong to use ratepayers' money in this way.
The campaign leaflet is misleading in every way. Many ratepayers have undoubtedly been conned into believing what the West Midlands county council says in its leaflet. I should like just a few minutes to put the record straight. I hope to show that it is way out of line with the way in which the new clause suggests that revenue should be spent.
The first thing that the leaflet attempts to tell the ratepayers in my area is that the Bill threatens local bus and train services. It says:
if the Bill becomes law Westminster could decide just how much West Midlands County Council could spend on them.
That is absolute rubbish.

Mr. Bob Cryer: It is right.

Mrs. Knight: The hon. Gentleman really must try to understand what I agree is a complicated matter. It may be beyond him, but he must try to understand it. The Bill will give the Secretary of State the power to tell each of the metropolitan authorities and the GLC—not just my authority—the maximum level of revenue support which the Government are prepared to protect from legal challenge each year. It is not said that they will decide how much the West Midlands county council, or any other council, can spend. The council will have its rights, duties and responsibilities left intact. If, in that framework, councils decide to spend more money, that is for the council to decide. At least it clears up a great deal of confusion under the present law. It does not remove the right of local councils to do what they wish with their money.

Mr. Les Huckfield: That is not true.

Mrs. Knight: It is true. I am sorry if Labour Members do not understand. They must read the Bill.
The second paragraph of the leaflet says:
The County Council has told the Government it needs to spend £42 million on buses and trains in the year that begins next April.
What is really important, surely, is to know how much the council is currently spending. It is no good saying that it has told the Government that it needs to spend £42 million without saying what its current spending is, because that is an important part of the argument.
The truth is that the planned expenditure on revenue support of £42 million has to be compared with expenditure currently estimated at £28·2 million. To say that one wishes to spend £42 million while the current expenditure is only £28 million is rather a big jump, and the ratepayers have every right to know how much of an increase the West Midlands county council is demanding. It is right and proper that that figure should have been set out in the leaflet, but it is not.
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Furthermore, we go on to hear that without that enormous jump
Hundreds of jobs of people now working in the bus-building and bus components industry would be lost.
People must understand that there are claims on public money for services in addition to transport. The Government recognise—and I hope that all hon. Members do—that we must subsidise public transport. It is not the principle of subsidy that is in question, but the amount that the country can afford to subsidise. That is what we are talking about. If we do not understand that we must balance other interests and claims on public money, there will be other problems with regard to local employment. Many businesses will close if they have to pay much more in rates.
Those hon. Members who represent constituencies in the west midlands know perfectly well that we have a frighteningly large number of factories the roofs of which have been taken off so that the rates do not need to be paid. If one is to demand more and more rates, more and more factories will go out of business.

Mr. Les Huckfield: The hon. Lady has obviously not sat on the Standing Committee since last November, unlike many hon. Members. As a Member who represents a Birmingham constituency, the hon. Lady must have seen the election addresses that went out at the time of the West Midlands metropolitan county council elections in May 1981. It was specifically stated that the Labour-controlled metropolitan county council would put up rates to bring fares down. That was what the hon. Lady's constituents voted for. That is what they are continuing to tell the hon. Lady they want to see in practice, by sending her hundreds of protests.

Mrs. Knight: The hon. Gentleman must not presume to tell me what my constituents mean, because I can tell him that many of my constituents have great problems in meeting their rate demands.
Another facet of the deceit in this leaflet is that it does not give a clear picture. It says nothing about the rate increase which, per se, is being demanded. The fact that the leaflet threatens further unemployment must be put clearly next to the undoubted truth that if rates continue to rise there will be further unemployment for reasons other than that given.

Mr. Cryer: rose—

Mrs. Knight: No, I shall not give way to the hon. Gentleman.
It is significant that the organisers of the campaign urge people to cut off the part of the leaflet on which the information is set out. It is no wonder they ask them to do that, because anyone who knows anything about the subject at all will know that the information is misleading. All that they wish Members of Parliament to have are the boxes on the other side ticked. They do not want us to know that people have been conned into ticking boxes on the basis of wrong information.
Against one of the boxes on the other side are the words:
I am against further rises in local bus and rail fares.
Who is not? "I am against service cuts." "I do not want to pay any more money." "I want fares to be kept down." Those are the comments that one hears. Those who make them must believe in Father Christmas. Where else they think the money is coming from, I do not know.
I was fascinated to see that one of my constituents had added another box and crossed out the others. Against that box it said:
I support the abolition of the West Midlands county council.
He ticked that box.
I should like to add two other questions to the form:
Do you agree that the West Midlands county council should have spent £70,000 of your money on this campaign?
We should then have seen how many people agreed with that. I should also have liked to ask:
Are you, as taxpayers and ratepayers, ready to contribute a further £18 million per annum on top of the money that you are already contributing to subsidies for the buses in the West Midlands?
We should have the truth if we are to have a campaign of this kind. We do not have an iota of it in this leaflet.
I finish by saying that I strongly support all subsidised transport, but subsidies cannot be limitless. I recognise that transport must be regarded as a service and that all services must be paid for. What I am trying to do is to make a plea for realism. In doing so we should, without hesitation, vote down the new clause.

Mr. Booth: I wish to respond to one point made by the Secretary of State. He misrepresented the new clause as a call for unlimited—he used the word unfettered—expenditure by public transport authorities. Our case has been clear. It is that there are hard, important decisions to be taken on issues of transport expenditure and transport policy. They are political decisions, and if there is to be any valuable role for local democracy the extent to which those decisions can be taken in the local political arena must be clearly defined. We should have the courage to say in the House, when we deal with transport legislation, that this is the part of policy that Government will determine, and this is the part that will be determined by local authorities.
We recognise the right of the Secretary of State under our law to prescribe the amount that we pay by way of transport supplementary grant, but also recognise the right of local authorities to campaign among their electorate for a mandate as to the type of services that should be run in their area, and the amount of ratepayers' money that they should add to the transport supplementary grant provided by the Secretary of State for the purpose of providing those services.
We disagree specifically with the Government about the idea that there should be a part of policy that is outwith the control of Parliament, outwith the control of local government and left to court decisions on the basis of appeals on precepts that are outwith what we believe should be properly defined in legislation as the role of local government.
Until that is accepted by the Government, we shall continue to have the difficulty of having matters determined in court in a way that makes nonsense of local democracy, of the voting process, and of allowing local people, through a proper democratic framework, to determine the type of service that they should have and that is provided with their public money.

Mr. David Howell: The right hon. Member for Barrow-in-Furness (Mr. Booth), in pressing the new clause, has been candid in explaining his reasons for doing so, and about what he and his right hon. Friends wish. The new clause would certainly allow the authorities concerned to spend up to any level of revenue grant that they chose. He said that he wanted them to campaign for that right to do so, and appeared to endorse the curious view of the hon. Member for Wood Green (Mr. Race) about the rule of law and the role of courts in this country. I wish to say a word or two about that before we end the debate, because it is important to realise the views that are being canvassed about the rule of law, to which we are all subject, however high and mighty, however elected and by whatever mandate we are empowered.
The right hon. Member for Barrow-in-Furness said that we should let local authorities campaign, or pay under the new clause, any level of revenue grant that they think is right and sensible. The legislation does not stop them doing so. On the other hand, it does not extend the protection against ratepayer challenge to any level of grant, but only to a limit specified by the protected expenditure level.
With regard to the campaigning, I draw attention to the robust speech of my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight). She spoke about the campaigning that she had come across against the Bill and about what it is alleged to do. She was right to point to some of the inaccurate and misleading advertisements. Whatever may be said about advertisements for certain policies, it must be wrong for inaccurate and misleading statements that are calculated to arouse anxiety but that have no basis in fact to be put out at ratepayers' expense. In particular, I refer to the advertisements that claim that the concessionary fares for the elderly, the blind and the disabled are to be threatened by the Bill. Those claims were put out as assertions, paid for by ratepayers, in a number of leaflets in metropolitan authorities. The claims are wholly untrue, as I have said many times, and as I repeat again, and I cannot refute them too often. The Bill does not affect the power of the local authorities to grant concessionary fares.
It is wrong to claim that the Bill affects that power and it is wrong for local authorities to put out leaflets claiming that there will be large rail and bus fare increases arising from the Bill. It is wrong to say that there are bound to be massive cuts in services, and, above all, it is wrong to say that the Bill is a threat to cheap concessionary fares for the elderly and children. I have been distressed to receive letters, as have other hon. Members, from people who


have been led by this propaganda to believe that the concessionary fares were to be taken away. That has no basis in fact.

Mr. Cowans: In balancing the books of a public transport executive, if it becomes necessary to cut services, can the Minister still say that the concessionary fares will not be threatened? A person may be standing at the bus stop with his nice new concessionary fare in his coat pocket, but the bus that he uses may not run any more.

Mr. Howell: It does not necessarily follow that the services that the elderly, blind and disabled use may be altered under the Bill by the more efficient running of the transport services. Whatever the hon. Member may say, leaflets have been sent out—I do not know whether with his approval or not—claiming that the concessionary fares for the elderly will be threatened, but that is not true and is inaccurate and misleading. However, the leaflets have been sent out by a public authority with ratepayers' money. I hope that hon. Members on both sides of the House will dissociate themselves from this practice. That is the type of campaigning that I hope we would all be against.
My hon. Friend the Member for Wellingborough (Mr. Fry) urged me to look beyond the proposal that there should be a protected level of expenditure for metropolitan transport authorities, and sought a more national scheme in which he felt that there should be fewer variations, and more laying down of a reasonable level of support throughout the nation. That is his view, but he knows that I shall not go along with that.
Local transport decisions about how much support to give in the shire counties or the metropolitan counties are bound to vary. There is bound to be a wide variety of local circumstances which must be properly taken into account. There is, as the Bill describes, a basis upon which the holder of my office seeks to put forward a national view, or a view of the amount of national resources that should be available for total support for local transport. Within that there should be, are bound to be, and properly will be, considerable variations. I would not seek to put too rigid a mould upon those.
The hon. Member for Wood Green was worried about the role of the courts and the law. I found his remarks curious and slightly chilling, because he clearly has the view that if there be an elected body, whether or not it is a statute-making one—and local authorities are not—once elected it should have the right, and should be allowed, to proceed unimpeded by any challenge in the courts by any person of any locus or standing. That is alien to our democratic tradition.
6 pm
I quote the words of Lord Justice Kerr in a recent judgment relating to the GLC and London Transport when he referred to the Wednesbury principle as follows:
If an authority misdirects itself in law, or acts arbitrarily on the basis of considerations which lie outside its statutory powers, or so unreasonably that its decisions cannot be justified by any objective standard of reasonableness, then it is the duty and function of the courts to pronounce that such decisions are invalid when these are challenged by anyone aggrieved by them and who has the necessary locus standi to do so".
That is a fundamental statement of view. It upholds the rights of the individual against authorities, however they may have derived their authority.
I am amazed that the hon. Member for Wood Green should challenge that proposition or that he should go

against the proposition put by Lord Justice Watkins in the earlier Bromley judgment in relation to the "Fares Fair" policy which was condemned by many people and which Labour Members supported and said should be restored. It was described as a hasty, ill-considered, unlawful and arbitrary use of power. Those who see a proper place for the rule of law in this country object to it.

Mr. Race: I am sure that the Secretary of State would not wish to misrepresent my views. My objection is not to the role of the courts in interpreting the intention of Parliament and the precise form in which the law stands, but to the courts making judgments about what is a fair balance between the ratepayers and the people who use public transport because the courts are not qualified to make such judgments.

Mr. Howell: I do not wish to misrepresent the hon. Gentleman. I see that point. The judgments, from one of which I quoted an extract, direct themselves to the view that the courts are not able to make a judgment as to the precise and right balance between the ratepayer and farepayer. That remains open to challenge by the ratepayer if it is believed that the local authority has not observed its fiduciary duty.
I thought that the hon. Gentleman said—if it is a misrepresentation, I withdraw it—that the courts should have no part in this matter. The courts and the rule of law have a part in our affairs and in our democracy at every level. I hope that every hon. Member supports that view.

Mr. Stan Crowther: No one is suggesting that an authority should be immune from legal action if it acts irresponsibly, foolishly and unreasonably. We object to the fact that under the Bill an authority which has acted completely reasonably and responsibly, and which under the present law is protected against action, in accordance with Mr. Justice Woolf's famous judgment in the Merseyside case, will in future be exposed to action because it has exceeded a figure arbitrarily fixed not by Parliament or the courts but by the Secretary of St ate who is taking the law into his own hands.

Mr. Howell: I am grateful to the hon. Member for that reassurance about his views of authorities that act unreasonably in an ill-considered, unlawful and arbitrary way. That is precisely what was happening in the "Fares Fair" case. If hon. Members had recognised that more openly and readily at the time, it would have improved the general debate.
As for reasonableness and balance in the future, the purpose of the Bill, which would be undermined by the new clause, is to provide a protected level of expenditure within which authorities that act reasonably and seek a balance between the ratepayer and the farepayer will have nothing to fear from a ratepayer's challenge, as in the past they had.
To some extent, the ratepayer's rights are being reduced but the capacity and ability of a local authority to proceed without fear of legal challenge and in the proper exercise of its powers under clause 5(2) are being strengthened.
Those are the reasons why I believe that the Bill is right and necessary at this time and will create the greater stability that has been lacking. The right hon. Member for Barrow-in-Furness began by referring to those reasons when he talked about the atmosphere of concern in which


the Bill was introduced. I believe that the House would be wrong to accept the new clause or the amendment and right to reject both of them.

Question put, That the clause be read a Second time:—

The House divided: Ayes 234, Noes 294.

Division No. 54]
[6.4 pm


AYES


Abse, Leo
Fitt, Gerard


Adams, Allen
Flannery, Martin


Allaun, Frank
Forrester, John


Alton, David
Foster, Derek


Ashley, Rt Hon Jack
Fraser, J. (Lamb'th, N'w'd)


Ashton, Joe
Freeson, Rt Hon Reginald


Atkinson, H. (H'gey,)
Freud, Clement


Bagier, Gordon A. T.
Garrett, John (Norwich S)


Barnett, Guy (Greenwich)
Garrett, W. E. (Wallsend)


Barnett, Rt Hon Joel (H'wd)
George, Bruce


Beith, A. J.
Ginsburg, David


Bennett, Andrew (St'kp't N)
Golding, John


Bidwell, Sydney
Gourlay, Harry


Booth, Rt Hon Albert
Graham, Ted


Boothroyd, Miss Betty
Grant, John (Islington C)


Bottomley, Rt Hon A. (M'b'ro)
Grimond, Rt Hon J.


Bradley, Tom
Hardy, Peter


Bray, Dr Jeremy
Harman, Harriet (Peckham)


Brocklebank-Fowler, C.
Harrison, Rt Hon Walter


Brown, Hugh D. (Proven)
Hart, Rt Hon Dame Judith


Brown, R. C. (N'castle W)
Hattersley, Rt Hon Roy


Brown, Ronald W. (H'ckn'y S)
Haynes, Frank


Brown, Ron (E'burgh, Leith)
Healey, Rt Hon Denis


Buchan, Norman
Heffer, Eric S.


Callaghan, Rt Hon J.
Holland, S. (L'b'th, Vauxh'll)


Callaghan, Jim (Midd't'n &amp; P)
Home Robertson, John


Campbell, Ian
Homewood, William


Campbell-Savours, Dale
Horam, John


Cant, R. B.
Hoyle, Douglas


Carmichael, Neil
Huckfield, Les


Cartwright, John
Hughes, Mark (Durham)


Clark, Dr David (S Shields)
Hughes, Robert (Aberdeen N)


Clarke, Thomas (C'b'dge, A'rie)
Hughes, Roy (Newport)


Cohen, Stanley
Jay, Rt Hon Douglas


Coleman, Donald
Jenkins, Rt Hon Roy (Hillh'd)


Conlan, Bernard
John, Brynmor


Cowans, Harry
Johnson, James (Hull West)


Cox, T. (W'dsw'th, Toot'g)
Johnson, Walter (Derby S)


Crawshaw, Richard
Jones, Rt Hon Alec (Rh'dda)


Crowther, Stan
Jones, Dan (Burnley)


Cryer, Bob
Kerr, Russell


Cunliffe, Lawrence
Kilroy-Silk, Robert


Cunningham, G. (Islington S)
Lambie, David


Cunningham, Dr J. (W'h'n)
Lamond, James


Dalyell, Tam
Leighton, Ronald


Davidson, Arthur
Lestor, Miss Joan


Davis, Clinton (Hackney C)
Lewis, Arthur (N'ham NW)


Davis, Terry (B'ham, Stechf'd)
Lewis, Ron (Carlisle)


Deakins, Eric
Litherland, Robert


Dean, Joseph (Leeds West)
Lofthouse, Geoffrey


Dewar, Donald
Lyon, Alexander (York)


Dixon, Donald
Lyons, Edward (Bradf'd W)


Dobson, Frank
McCartney, Hugh


Dormand, Jack
McDonald, Dr Oonagh


Dubs, Alfred
McElhone, Mrs Helen


Duffy, A. E. P.
McGuire, Michael (Ince)


Dunnett, Jack
McKay, Allen (Penistone)


Dunwoody, Hon Mrs G.
McKelvey, William


Eadie, Alex
MacKenzie, Rt Hon Gregor


Eastham, Ken
Maclennan, Robert


Edwards, R. (W'hampt'n S E)
McMahon, Andrew


Ellis, R. (NE D'bysh're)
McNally, Thomas


Ellis, Tom (Wrexham)
McTaggart, Robert


English, Michael
McWilliam, John


Ennals, Rt Hon David
Magee, Bryan


Evans, John (Newton)
Marks, Kenneth


Ewing, Harry
Marshall, D (G'gow S'ton)


Faulds, Andrew
Marshall, Dr Edmund (Goole)


Field, Frank
Marshall, Jim (Leicester S)





Mason, Rt Hon Roy
Skinner, Dennis


Maxton, John
Smith, Cyril (Rochdale)


Maynard, Miss Joan
Smith, Rt Hon J. (N Lanark)


Meacher, Michael
Snape, Peter


Mikardo, Ian
Spellar, John Francis (B'ham)


Millan, Rt Hon Bruce
Spriggs, Leslie


Miller, Dr M. S. (E Kilbride)
Stallard, A. W.


Morris, Rt Hon A. (W'shawe)
Steel, Rt Hon David


Morris, Rt Hon C. (O'shaw)
Stewart, Rt Hon D. (W Isles)


Morris, Rt Hon J. (Aberavon)
Stoddart, David


Morton, George
Stott, Roger


Moyle, Rt Hon Roland
Strang, Gavin


Mulley, Rt Hon Frederick
Straw, Jack


Newens, Stanley
Summerskill, Hon Dr Shirley


Oakes, Rt Hon Gordon
Taylor, Mrs Ann (Bolton W)


Ogden, Eric
Thomas, Dafydd (Merioneth)


O'Halloran, Michael
Thomas, Jeffrey (Abertillery)


O'Neill, Martin
Thomas, Mike (Newcastle E)


Orme, Rt Hon Stanley
Thorne, Stan (Preston South)


Park, George
Tilley, John


Parker, John
Tinn, James


Pavitt, Laurie
Torney, Tom


Pendry, Tom
Varley, Rt Hon Eric G.


Penhaligon, David
Wainwright, E. (Dearne V)


Pitt, William Henry
Wainwright, R. (Colne V)


Powell, Raymond (Ogmore)
Walker, Rt Hon H. (D'caster)


Race, Reg
Wardell, Gareth


Radice, Giles
Weetch, Ken


Rees, Rt Hon M (Leeds S)
Wellbeloved, James


Richardson, Jo
Welsh, Michael


Roberts, Albert (Normanton)
White, J. (G'gow Pollok)


Roberts, Allan (Bootle)
Whitehead, Phillip


Roberts, Ernest (Hackney N)
Whitlock, William


Roberts, Gwilym (Cannock)
Wigley, Dafydd


Robertson, George
Willey, Rt Hon Frederick


Robinson, G. (Coventry NW)
Williams, Rt Hon A. (S'sea W)


Rodgers, Rt Hon William
Williams, Rt Hon Mrs (Crosby)


Rooker, J. W.
Wilson, Gordon (Dundee E)


Roper, John
Wilson, Rt Hon Sir H. (H'ton)


Ross, Ernest (Dundee West)
Wilson, William (C'try SE)


Ross, Stephen (Isle of Wight)
Winnick, David


Rowlands, Ted
Woodall, Alec


Sever, John
Woolmer, Kenneth


Sheerman, Barry
Wrigglesworth, Ian


Sheldon, Rt Hon R.
Wright, Sheila


Shore, Rt Hon Peter
Young, David (Bolton E)


Short, Mrs Renée



Silkin, Rt Hon J. (Deptford)
Tellers for the Ayes:


Silkin, Rt Hon S. C. (Dulwich)
Mr. James Hamilton and


Silverman, Julius
Mr. Norman Hogg.


NOES


Adley, Robert
Bright, Graham


Aitken, Jonathan
Brinton, Tim


Alexander, Richard
Brittan, Rt. Hon. Leon


Alison, Rt Hon Michael
Brooke, Hon Peter


Amery, Rt Hon Julian
Brotherton, Michael


Ancram, Michael
Browne, John (Winchester)


Arnold, Tom
Bruce-Gardyne, John


Aspinwall, Jack
Bryan, Sir Paul


Atkinson, David (B'm'th,E)
Buchanan-Smith, Rt. Hon. A.


Baker, Kenneth (St.M'bone)
Buck, Antony


Baker, Nicholas (N Dorset)
Budgen, Nick


Beaumont-Dark, Anthony
Bulmer, Esmond


Bendall, Vivian
Butcher, John


Benyon, Thomas (A'don)
Carlisle, John (Luton West)


Benyon, W. (Buckingham)
Carlisle, Kenneth (Lincoln)


Berry, Hon Anthony
Carlisle, Rt Hon M. (R'c'n)


Best, Keith
Chalker, Mrs. Lynda


Bevan, David Gilroy
Channon, Rt. Hon. Paul


Biffen, Rt Hon John
Chapman, Sydney


Biggs-Davison, Sir John
Churchill, W. S.


Blackburn, John
Clark, Hon A. (Plym'th, S'n)


Blaker, Peter
Clark, Sir W. (Croydon S)


Body, Richard
Clegg, Sir Walter


Bonsor, Sir Nicholas
Cockeram, Eric


Bottomley, Peter (W'wich W)
Colvin, Michael


Bowden, Andrew
Cope, John


Boyson, Dr Rhodes
Corrie, John


Braine, Sir Bernard
Costain, Sir Albert






Cranborne, Viscount
Kellett-Bowman, Mrs Elaine


Critchley, Julian
Kimball, Sir Marcus


Crouch, David
King, Rt Hon Tom


Dickens, Geoffrey
Kitson, Sir Timothy


Dorrell, Stephen
Knight, Mrs Jill


Douglas-Hamilton, Lord J.
Knox, David


Dover, Denshore
Lamont, Norman


du Cann, Rt Hon Edward
Lang, Ian


Dunn, Robert (Dartford)
Langford-Holt, Sir John


Durant, Tony
Latham, Michael


Eden, Rt Hon Sir John
Lawrence, Ivan


Edwards, Rt Hon N. (P'broke)
Lawson, Rt Hon Nigel


Eggar, Tim
Lee, John


Elliott, Sir William
Le Marchant, Spencer


Emery, Sir Peter
Lennox-Boyd, Hon Mark


Eyre, Reginald
Lewis, Sir Kenneth (Rutland)


Fairbairn, Nicholas
Lloyd, Ian (Havant &amp; W'loo)


Fairgrieve, Sir Russell
Lloyd, Peter (Fareham)


Faith, Mrs Sheila
Loveridge, John


Farr, John
Lyell, Nicholas


Fell, Sir Anthony
McCrindle, Robert


Fenner, Mrs Peggy
Macfarlane, Neil


Finsberg, Geoffrey
MacGregor, John


Fisher, Sir Nigel
MacKay, John (Argyll)


Fletcher, A. (Ed'nb'gh N)
Macmillan, Rt Hon M.


Forman, Nigel
McNair-Wilson, M. (N'bury)


Fowler, Rt Hon Norman
McNair-Wilson, P. (New F'st)


Fox, Marcus
McQuarrie, Albert


Fraser, Peter (South Angus)
Madel, David


Fry, Peter
Major, John


Gardiner, George (Reigate)
Marland, Paul


Gardner, Sir Edward
Marlow, Antony


Garel-Jones, Tristan
Marshall, Michael (Arundel)


Gilmour, Rt Hon Sir Ian
Marten, Rt Hon Neil


Goodhart, Sir Philip
Mates, Michael


Goodhew, Sir Victor
Maude, Rt Hon Sir Angus


Goodlad, Aiastair
Mawby, Ray


Gorst, John
Mawhinney, Dr Brian


Gow, Ian
Maxwell-Hyslop, Robin


Gower, Sir Raymond
Mayhew, Patrick


Grant, Sir Anthony
Mellor, David


Greenway, Harry
Meyer, Sir Anthony


Grieve, Percy
Miller, Hal (B'grove)


Griffiths, Peter (Portsm'th N)
Mills, Iain (Meriden)


Grist, Ian
Mills, Sir Peter (West Devon)


Grylls, Michael
Miscampbell, Norman


Gummer, John Selwyn
Moate, Roger


Hamilton, Hon A.
Monro, Sir Hector


Hamilton, Michael (Salisbury)
Montgomery, Fergus


Hampson, Dr Keith
Moore, John


Hannam, John
Morgan, Geraint


Haselhurst, Alan
Morris, M. (N'hampton S)


Havers, Rt Hon Sir Michael
Morrison, Hon C. (Devizes)


Hawkins, Sir Paul
Murphy, Christopher


Hawksley, Warren
Myles, David


Hayhoe, Barney
Neale, Gerrard


Heath, Rt Hon Edward
Needham, Richard


Heddle, John
Neubert, Michael


Henderson, Barry
Newton, Tony


Heseltine, Rt Hon Michael
Normanton, Tom


Hicks, Robert
Nott, Rt Hon Sir John


Higgins, Rt Hon Terence L.
Onslow, Cranley


Hill, James
Oppenheim, Rt Hon Mrs S.


Hogg, Hon Douglas (Gr'th'm)
Osborn, John


Holland, Philip (Carlton)
Page, John (Harrow, West)


Hooson, Tom
Page, Richard (SW Herts)


Hordern, Peter
Parkinson, Rt Hon Cecil


Howe, Rt Hon Sir Geoffrey
Parris, Matthew


Howell, Rt Hon D. (G'ldf'd)
Patten, Christopher (Bath)


Howell, Ralph (N Norfolk)
Pattie, Geoffrey


Hunt, David (Wirral)
Pawsey, James


Hunt, John (Ravensbourne)
Percival, Sir Ian


Hurd, Rt Hon Douglas
Peyton, Rt Hon John


Irvine, Rt Hon Bryant Godman
Pollock, Alexander


Irving, Charles (Cheltenham)
Porter, Barry


Jessel, Toby
Prentice, Rt Hon Reg


Johnson Smith, Sir Geoffrey
Price, Sir David (Eastleigh)


Jopling, Rt Hon Michael
Prior, Rt Hon James


Joseph, Rt Hon Sir Keith
Proctor, K. Harvey


Kaberry, Sir Donald
Pym, Rt Hon Francis





Rathbone, Tim
Tapsell, Peter


Rees-Davies, W. R.
Tebbit, Rt Hon Norman


Renton, Tim
Temple-Morris, Peter


Rhodes James, Robert
Thatcher, Rt Hon Mrs M.


Rhys Williams, Sir Brandon
Thomas, Rt Hon Peter


Ridley, Hon Nicholas
Thompson, Donald


Rifkind, Malcolm
Thornton, Malcolm


Rippon, Rt Hon Geoffrey
Townend, John (Bridlington)


Roberts, M. (Cardiff NW)
Trippier, David


Roberts, Wyn (Conway)
Trotter, Neville


Rossi, Hugh
van Straubenzee, Sir W.


Rost, Peter
Vaughan, Dr Gerard


Rumbold, Mrs A. C. R.
Viggers, Peter


Sainsbury, Hon Timothy
Waddington, David


St. John-Stevas, Rt Hon N.
Wakeham, John


Shaw, Giles (Pudsey)
Waldegrave, Hon William


Shaw, Sir Michael (Scarb')
Walker, Rt Hon P. (W'cester)


Shelton, William (Streatham)
Walker, B. (Perth)


Shepherd, Colin (Hereford)
Walker-Smith, Rt Hon Sir D.


Shepherd, Richard
Wall, Sir Patrick


Shersby, Michael
Waller, Gary


Silvester, Fred
Walters, Dennis


Skeet, T. H. H.
Warren, Kenneth


Smith, Dudley
Watson, John


Smith, Tim (Beaconsfield)
Wells, John (Maidstone)


Speed, Keith
Wheeler, John


Speller, Tony
Whitelaw, Rt Hon William


Spence, John
Whitney, Raymond


Spicer, Jim (West Dorset)
Wickenden, Keith


Spicer, Michael (S Worcs)
Wiggin, Jerry


Sproat, Iain
Wilkinson, John


Squire, Robin
Williams, D. (Montgomery)


Stainton, Keith
Winterton, Nicholas


Stanbrook, Ivor
Wolfson, Mark


Stanley, John
Young, Sir George (Acton)


Steen, Anthony
Younger, Rt Hon George


Stevens, Martin



Stewart, A. (E Renfrewshire)
Tellers for the Noes:


Stewart, Ian (Hitchin)
Mr. Carol Mather and


Stokes, John
Mr. Robert Boscawen.


Stradling Thomas, J.

Question accordingly negatived.

New Clause 2

MAKING AND RETENTION OF SURPLUS BY A PTE

'(1) Nothing in this Act shall affect the powers of an Executive and of an Authority as the case may be—

(a) so to arrange the affairs of the Executive and any of its subsidiaries as to achieve a surplus of revenues to aid the efficient operation of the Executive during such period as they determine to be appropriate and
(b) to retain any such surplus or proportion of such surplus as is referred to in (a) above for use for such purpose and at such time as they think fit.

(2) Where any Executive retains such surplus as is mentioned in (b) above, the Secretary of State in giving guidance under section 4 above shall not be entitled to take into account the amount of any such surplus.'. — [Mr. Robert Hughes.]

Brought up, and read the First time.

Mr. Robert Hughes: I beg to move, That the clause be read a Second time.
The purpose of the new clause is to clarify the position with regard to reserves in local authority accounts in relation to transport matters. It is perfectly normal for surpluses to be set aside from time to time for expenditure at some unspecified time in the future. Many undertakings, especially transport undertakings, are extremely prudent in putting surpluses in reserve for the future acquisition of plant or equipment or to take care of


their capital account. That is a perfectly prudent way in which to proceed and one would expect it to achieve the Secretary of State's approval.
The Bill as drafted, however, seems to be deficient in relation to the way in which surpluses can be used. Indeed, it is not even clear that surpluses may be set aside for future use. As we understand the Bill, if a surplus is built up over a 12-month period it must be spent within the following 12 months. It seems unreasonable that a passenger transport undertaking should have no control at all over its reserves and no ability to plan its accounts.
The difficulty is that as a result of the disclosure provisions in the Bill the Secretary of State will know the state of the accounts of the PTA or PTE concerned. It will thus be open to him to intervene with regard to the use of reserves.
I shall not go through the whole Bill but it is clear that the Secretary of State is not simply taking a general power to say what he thinks expenditure levels should be; he is taking the power to intervene in every aspect of local government transport policy. He is taking the right to interfere directly with the running of the executive and the judgments of the PTA. That is wholly wrong. If he believes, as he seems to, in local authorities acting reasonably and sensibly, he should give them the powers to do that.
I envisage circumstances in which an authority may have built up a reserve for any purpose, but the Secretary of State will have considerable powers through the Bill to tell it how to use those reserves, irrespective of whether that is what it wants. He will issue guidance to local authorities. As they must take it into account, if they refuse his advice, the PTA or the PTE might be challenged in the courts.
If new clause 2 is accepted, it will be clear that an executive will be empowered to achieve a surplus, to retain it and, where a surplus is repaid, the Secretary of State will not be entitled to take account of that surplus in his figures when he issues guidance. The new clause is eminently sensible. I can see no reason why the Secretary of State should refuse to accept it and I therefore commend it to the House.

The Under-Secretary of State for Transport (Mr. Reginald Eyre): Perhaps it would be for the convenience of the House if I gave the Government's reaction to new clause 2 and the speech of the hon. Member for Aberdeen, North (Mr. Hughes). I shall try to reply in straightforward and commonsense terms to the hon. Gentleman's points.
Executives are able to create a reserve if they wish to use surpluses, although they would be doing that at the ratepayers' expense. If that reserve were used to support revenue expenditure, such expenditure would have to be authorised under the plan and come within the protected expenditure level.
The main purpose of new clause 2 and the redefined financial duty is to strengthen the financial disciplines of the executive to operate commercially. The fault with the hon. Gentleman's proposal is that new clause 2 would undermine that necessary financial discipline. It would enable the executive to use ratepayers' money to build up a surplus which could then be used for any purpose that it thought fit.

Mr. Cowans: New clause 2 is reasonable. Before the Under-Secretary of State for Transport spoke, I thought that it would go through with the speed of light, judging from the speeches of some Conservative Members.
The hon. Member for Birmingham, Edgbaston (Mrs. Knight) said that it was right and proper that local authorities should be able to spend their own money. The hon. Member for Wellingborough (Mr. Fry), much of whose speech I agreed with, made a strong plea for standard concessionary fares and for local authorities to use their finances in their own areas according to need. As an ex-local authority man, I agree with what he said, but the hon. Members for Edgbaston and Wellingborough voted with the Government.
Life is made difficult when one thing is said in the Chamber—the version that is read outside—but when it comes to a Division the diametrically opposite view is presented. It is nonsensical when hon. Members allegedly support a course of action in the House, but when the chips are down, they ensure that that course of action cannot take place. I have heard of people riding two horses at the same time, but that is ridiculous.
The Minister has a chance to get off the hook. New clause 2 is eminently reasonable and ties in nicely with new clause 1 which the Government did not have the sense to support. New clause 1 provided for when a local authority was forced by the Government to go to the market to borrow. The only solution to a contingency that the Secretary of State could provide was to borrow. If the Secretary of State believes that it is good business to go to the market at an especially bad time when it makes more economic sense to use the capital that one already has, I suggest that the business men and women are on this side of the House and not, as is often said, on the Conservative Benches.
It seems that the Secretary of State wants it both ways, the Bill could become an Act that remains in force for the next 100 years. That is often forgotten. If a local authority manages its affairs so that it can achieve a surplus, it seems abundantly sensible that that surplus should be utilised for the benefit of the people in the community whence it came, in the form, for example, of concessionary fares which the hon. Member for Wellingborough mentioned.
What will happen if a prudent authority manages, even within this nonsense of a Bill, to make a surplus? The Secretary of State will immediately claw it back. Where is the incentive in that for any local authority to make a surplus?
The Secretary of State has the audacity to stand up as the champion of the ratepayers. The only ratepayers that we hear about from Conservative Members are industrial ratepayers. Time and again it is the industrial ratepayers, not the domestic ones, whose case has been made by Conservative Members. It is always the industrial ratepayer who is disfranchised and does not have the "dough". We hear little about the other people called domestic ratepayers.
6.30 pm
The new clause provides an opportunity to redress the balance. If the Minister of State went to his industrial ratepayers—he might mention it casually to the domestic ratepayers too—he might find that they agreed with the new clause. If a surplus accumulated by an authority was ploughed back into its transport undertaking, it could provide a better transport system; industries might


therefore have more customers and they would make better profits. Does that not make sense? The Secretary of State says that if an authority makes a surplus he will penalise it and claw back the surplus under the protected expenditure level. No local authority would have an incentive to make a surplus.
The proposal of the Minister is nonsense in anybody's terms. It is not good commercial practice. It is the same as saying to an industry which gets a grant from the Government to build a factory that if it is successful they will take back the grant out of the overall surplus. The Government do not do that. Why, therefore, would it not be sensible to treat transport authorities in the same way?
I do not see why the Government cannot accept the new clause. It would not destroy the intent behind the Bill. I oppose the whole Bill. Unfortunately, my hon. Friends and I find ourselves in the tragic situation of trying to make something better out of patent nonsense. I know that other hon. Members want to speak. I am renowned in the House for my brevity, although I might lose that record quickly.
If a local authority made a surplus, it could, by budgeting sensibly, restore many of the things that the Secretary of State has taken away. It could reintroduce children's fares at a level less than that laid down by the Secretary of State. Many businesses invest their surpluses. By the new clause we want a local authority to have the right to invest any surplus within the community from which it came. Surely that is reasonable. I cannot see that it destroys the political dogma with which the Bill is invested.
If a local authority knew that it could use a surplus within its area, that would be a great incentive. For instance, a local authority might introduce a concessionary free travel system such as is operated in Tyne and Wear.
Because section 15(3) of the Transport Act 1968 is to be phased out, which my hon. Friend the Member for Keighley (Mr. Cryer) knows all about, some of the things which would have been provided under it might be provided out of a surplus, giving the community a much better service. It might be possible to have advanced technology which might not be submitted under the protected expenditure level but which was desirable within the area. Surely that would be sound practice.
The tragedy of the Bill is that, far from protecting the industrial ratepayer, which the Secretary of State imagines it will do, the opposite will be the case. Instead of a surplus being used for the benefit of the industries which have paid the rates, it will be taken back by the Chancellor of the Exchequer. That will do nothing for the industrial ratepayers within that area: it will not do much for the Chancellor of the Exchequer because what was a large amount for the community from which it came would be peanuts to the Chancellor of the Exchequer.
One could argue that this proposal does not make a major political point but it would restore to local authorities two things taken away by the Secretary of State: first, the incentive to make a surplus which could be invested in the community and, secondly and most important, the power for a local authority to make decisions in the interests of the community without the heavy dead hand of the Secretary of State being placed upon it. Local authorities would welcome that. I am amazed that the Minister does not welcome it. If he sent the proposal to the Confederation of British Industry, it might say that it would be good practice. Perhaps that is why he would not send it to that body.

Mr. David Gilroy Bevan: Much would depend on how surpluses were utilised. I want to draw attention to how some of the loss has been made through the distribution by West Midlands county council of this infamous pink pamphlet. On the admission of the council the pamphlet has cost ratepayers £73,308, for printing, distribution, putting on hoardings and many items which are not specified. This was done on the ratepayers' behalf, so-called.
One million of these documents and advertisements in the press have enjoined my constituents and other constituents in the west midlands, at my expense as a west midlands ratepayer, to save local buses and trains on four grounds. People are asked to agree with these statements:
I am against further rises in local bus and rail fares.
I do not want service cuts—that would cause me considerable problems.
I object to the Transport Bill in its present form. I would like to see more public money made available to support public transport in the West Midlands.
Those are the four loaded statements which this infamous document puts to ratepayers. If money accumulated under the provisions of the new clause turned into a surplus, it might be spent in this manner. It is upon these grounds that I maintain that the spending of the surplus by the local authority would be out of order.
My constituents have said several things about the pamphlet. One of them said:
I support the view that we would be well rid of the West Midlands county council and their wasteful spending ways.
The council has probably spent over £100,000, with indirect costs. We have argued in the House whether it is right or proper for the Government to spend £1 million on propaganda. Here is an example of at least one-tenth of that sum having been spent without reference to the public, from either surpluses or losses. Therefore, surpluses accumulated, if any—to date the West Midlands transport authority has been dealing only in losses—could be used in that offensive manner.
Another constituent wrote:
I read the attached with increasing anger. We as individuals, manufacturing industry and a country cannot afford luxuries, which include excessive subsidies. Please do all you can to prevent those 'lunatics' at county hall increasing rates for 'political' purposes.
I recently commuted to work on the Birmingham bus system, clean, fast, efficient but no passengers! Keep up the good work. The medicine is not palatable—but it is curing the patient.
Another constituent, objected strongly in similar terms to ratepayers' money being spent, whether out of surpluses, as would happen if the clause were passed, or out of accumulated losses. Therefore, to support that policy the county council will raise fares by about £15 million. A fine against it of £25 million will be encouraged. Therefore, there will be an increase in costs of about £40 million because of the campaign, which will wipe out the proposed rate reduction of 12½ per cent. to be made by the district council. Of that £15 million reduction proposed by the district council, £4 million would have been invested in education and would have led to many people being employed as teachers.

Mr. Cowans: I am following the hon. Gentleman's argument closely. He seems to be deriding the West Midlands county council's leaflet. If he wants to do so, that is his prerogative. Will he explain the difference between the West Midlands county council sending a


leaflet to its electorate and the Secretary of State sending a letter to my constituents? The only difference is that at least in the council's leaflet there were little boxes so that people could show what they thought. There were none in the Secretary of State's letter, which was produced at the taxpayers' expense.

Mr. Bevan: There was also a letter sent out in July by the Secretary of State inviting all local authorities to discuss his Bill. The reaction from the hon. Gentleman's authority and every other authority was nil. No one came forward during that long period until the issue of the Bill and the White Paper. The authorities did not bother to discuss it or suggest the amendments that are now being moved. Therefore, the hon. Gentleman will not be surprised if I and others are extremely sceptical about the Opposition's new clauses.
Another of my constituents, objecting to the infamous documents that were issued at such colossal cost to the ratepayer without his knowledge, said that he was ashamed at the enclosed leaflet and felt that it was inappropriate that it should be issued. He had not completed the form and did not intend to do so. He thought that the use of public money in this way was outrageous.
6.45 pm
If that was the way in which any accumulated surpluses were spent by either the authority or the executive, all Conservative Members would have to vote accordingly against the amendment.
Out of the circulation of about 50,000 leaflets to my constituents, about 150 have been returned. Another 90 have been returned with names in a long list, but without addresses. Out of the 150, at least 26 have been returned in which some of the four boxes have not been filled in, or none. The questions in the leaflet are not synonymous. One cannot be both against rises in local bus and rail fares and not want service cuts. Many people have not signed one or the other of wanting service cuts or objecting to the Bill in its present form. If that is the reaction of my 50,000 constituents, with only 100 of them bothering to fill in the form, many of them objecting and only partially filling in the forms—

Mr. Cowans: On a point of order, Mr. Deputy Speaker. Is it in order to read out letters of this nature? I have received a petition signed by 150,000 people who are diametrically opposed to the Government's proposals. I shall not attempt to read out all their letters. I should welcome your ruling.

Mr. Deputy Speaker (Mr. Paul Dean): There is nothing out of order in what I have heard so far.

Mr. Bevan: I am obliged to you, Mr. Deputy Speaker. I do not intend to read out anything like 150,000 letters.
The fact is that my constituents could not be bothered to fill in the forms after the West Midlands county council had spent over £73,000 in issuing them. Those who bothered to write letters nearly universally condemned what had been done. One takes seriously the points that they made, especially that of a lady who described herself as possessing only two bicycles as a means of transport. She said:
I support the view that we would be well rid of the West Midlands county council and their wasteful spending ways.

Therefore when I answer the handful of people who bothered to fill in the forms I shall bear in mind new clause 2, which proposes that an executive should spend its surpluses as it likes. Under the present administration in the west midlands there is a glaring example of how a transport authority spends its losses, to the detriment of the ratepayers and the travelling public.
Therefore, I ask my hon. Friend the Under-Secretary of State carefully to consider the leaflets, which were framed with loaded questions, to see what action he can take, contrary to the action suggested in the new clause 2, which will prevent that frivolous and deceitful way of spending ratepayers' money.

Mr. Race: When the hon. Gentleman replies to his constituents, as well as having his little tirade against the West Midlands county council, will he mention that his Government are spending £18,000 million of taxpayers' money on supporting 3½ million people in idleness?

Mr. Bevan: There was a reference to that matter in Prime Minister's Question Time today, when my right hon. Friend pointed out that it was the Labour Government who set the precedent of spending taxpayers' money to support publicity campaigns. However, I have no more to say about that.
We must view with great scepticism the import of clauses such as new clause 2, which purports to apportion money in the way in which an authority would wish. Therefore, I shall support the Government in opposing the new clause.

Mr. Cryer: It takes one's breath away to hear a Conservative Member object to expenditure by the West Midlands county council on explaining the position to their constituents and asking for a response when that same Government supporter was no doubt bellowing out support for and affirmation of the proposal of the Secretary of States for Defence to spend £1 million of taxpayers' money—not £70,000—on a campaign of spurious defence propaganda which would be better entered, in my view, in the electoral returning officer's books as election expenditure this year.

Mr. Bevan: Does the hon. Member agree that in the instance he cites there is debate about whether the money should be spent in the future whereas in the instance that I have brought forward the money has already been spent without reference to the ratepayers?

Mr. Cryer: All I can say is that I am pleased that the Government have been caught out because, if not, the money would have been spent long ago. I am pleased that the criticisms we have raised have stopped what is not a carefully prepared assessment to which the public are asked to respond but a political propaganda campaign which the Secretary of State for Defence is trying to mount with the aid of a slick advertising organisation such as Saatchi and Saatchi.

Mr. Arthur Lewis: My hon. Friend is wrong. If it were Saatchi and Saatchi, there might be some point in the exercise. Is he not aware that it is going to J. Walter Thompson, an American firm? The Prime Minister says that we should buy British, but the Government are to give £1 million to an American advertising agency.

Mr. Deputy Speaker: We seem to be straying from the subject of the new clause to which I hope the hon. Gentleman will now address his remarks.

Mr. Cryer: I am coming straight to the new clause, Mr. Deputy Speaker. I mentioned a public relations campaign run by a firm "like" Saatchi and Saatchi because I know that that is not the firm involved.
If an executive or an authority were able to use a surplus, it would help the campaign to buy British. If it had a surplus and felt, in the absence of bus grants, for example, which are being phased out, that it wanted to replace some of the fleet, it might well help Metro Cammell Weyman in the con-stituency of the hon. Member for Birmingham, Yardley (Mr. Bevan), which badly needs the orders.
In Committee I pointed out that Bristol buses were making Leyland, having phased out the make of Bristol. A couple of days ago came the announcement that Bristol was closing down. It would be very helpful if PTAs had the right to spend surpluses on new vehicles and perhaps help to finance new developments in transport by this means.
What I find amazing is any suggestion that the Government should not accept this new clause. For instance, the West Yorkshire metropolitan county council has been forced by Government fiat to bring forward from the reserves—in effect, the surplus of past years—nearly £4 million in order to finance the support for the bus services which it wants to give in 1983–84. In spite of being able to do that, the authority will still have to raise fares to make up a difference of £10 million between the guidelines laid down by the Secretary of State and the expenditure which the passenger transport authority wishes to incur in order to maintain bus services in West Yorkshire. The Government have forced it to cut back, but in order to preserve the services at their bare minimum they have had to use a past surplus.
It seems eminently reasonable that the new clause should be accepted by the Government to allow local authorities to do just that sort of thing because, as has been pointed out time and time again in Committee, if local authorities are not allowed to finance services in this sort of way services will be cut, services such as those to hospitals and those in rural areas. It is very reasonable, therefore, for a passenger transport authority to examine its resources and see how best it can keep those services going.
In these circumstances, a surplus could be used whilst being disregarded by the Secretary of State in his calculation of the degree of support. It is extraoridinary that the Secretary of State has approved the action of the West Yorkshire metropolitan county council in using a surplus in this fashion, when all this is doing is putting into primary legislation the administrative approval of the Department of Transport. That means greater parliamentary accountability, which I would consider a positive step forward, rather than simply leaving matters to be decided in Whitehall. It would give the West Yorkshire metropolitan county council the right to allocate its funds instead of having to go cap in hand to the Department to ask for permission. If this Bill gets through, that cap-in-hand process will be repeated time and again because the essence of this legislation is that Whitehall knows best.

Mr. Cowans: The situation is worse because if this new clause is not carried then the Secretary of State can be very selective as to where he makes a decision. The new clause would prevent that political selection.

Mr. Cryer: My hon. Friend is absolutely right. In the case of West Yorkshire, for example, the bus services are

financed from fare revenue to the tune of over 70 per cent. It may well be that, for historic reasons, the Secretary of State will accept that as reasonable. West Yorkshire wants to move towards greater support so that fares fall rather than rise, so that greater use is made of buses and so that there are more opportunities for people to travel. However, the Secretary of State will undoubtedly attack the real pillars of achievement in passenger transport such as South Yorkshire, which has given significant support to bus services for a number of years. This is accepted by the electorate of that area and it has resulted in superb low-fare bus services which are widely used and appreciated by working men and women and their families.
If the clause is not accepted, the Secretary of State will be able to bring selective political judgment to bear against those Labour-controlled local authorities that are carrying out Labour policy with obvious success both at elections and in greater numbers of people using the services. This is clear evidence of the success of Labour's transport policy. This is what the Secretary of State wishes to stop. If this new clause is not passed then he will use his powers selectively and, in my view, vindictively against Labour-controlled authorities.

Mr. Robert Hughes: One wonders whether Ministers actually read the speeches that they deliver before or after they have delivered them. In the many hours we have spent in Committee, on almost every amendment and in almost every debate—the same has happened today—we have been advised that local authorities should follow good commercial practice in transport. I am glad to see the hon. Member for Portsmouth, North (Mr. Griffiths) nodding his head in agreement. Yet when we have a new clause which actually puts the PTA in the position of behaving in a good, sound, commercial fashion, we find it is not allowed to do so. Every reasonable commercial organisation that I know builds up a reserve as a contingency fund against unexpected costs or to buy capital equipment in the future. That is over and above the proper procedure in a commercial company of running a depreciation account. That is good commercial practice. However, that is not what the Secretary of State or the Under-Secretary of State says. The Under-Secretary of State says that if the new clause is accepted it will weaken the local authority's financial discipline, but it will do the very reverse It seeks to strengthen the financial discipline of the passenger transport authority and the passenger transport executive.
7 pm
I do not understand why a passenger transport authority or metropolitan county is singled out and cannot have reserves. In general, local authorities are entitled to build up reserves and to use them as they think fit. The dead hand of the Secretary of State is to touch every aspect of local authority transport policy.
We should at least be grateful to the Under-Secretary of State for making it perfectly clear that the passenger transport authority or the passenger transport executive cannot carry reserves. Before this debate, there was some doubt about the ability to carry them, but the situation is now clear. The Under-Secretary of State said that an authority could build up a surplus during a financial year but that when setting the protected expenditure level for the next financial year, he would deduct the amount of the reserves. I should explain that the protected expenditure


level is the amount of money that the Secretary of State believes that a local authority should provide in rate support for transport services.
The Under-Secretary of State cannot say that the money can be held in reserve, but that it will then be taken away and that the authority will be open to challenge in court for having the temerity to hold a reserve. It could be prejudicial to the ratepayer's interest to hold a reserve. The Secretary of State wants authorities not to keep money in reserve and to accrue some income from the interest, but to borrow money at the excessive rates of interest that have existed under this Government. That cannot be in the ratepayer's interest. If it is a particularly bad winner and an authority has excessive costs to bear, it cannot hold a reserve to deal with such a contingency. It must expend the reserve and then borrow money. The only person to benefit from borrowing is the moneylender. Indeed, we all know the Government's great respect for moneylenders.

Mr. Cryer: I am sure that my hon. Friend will agree that the Government are trying to put metropolitan county councils on exactly the same footing as Argentina so that they have to borrow Government money to prop them up, just as the Government are propping up Argentina.

Mr. Hughes: I can understand why the Argentines incurred the Prime Minister's wrath. However, I do not know what the metropolitan counties have done to incur her wrath and to be treated in the same way. All responsibility is being taken from them.
It has been shown time after time that local authorities do not have the last word. The first, middle and last words all rest with the Secretary of State and with his determination of what a local authority and passenger transport authority can do. They are not allowed to carry reserves. That shows how he is interfering in local democracy. I invite the House to support the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes.228, Noes 288

Division No. 55]
[7.4 pm


AYES


Abse, Leo
Carmichael, Neil


Adams, Allen
Cartwright, John


Allaun, Frank
Clark, Dr David (S Shields)


Alton, David
Clarke, Thomas(C'b'dge, A'rie)


Anderson, Donald
Cohen, Stanley


Ashley, Rt Hon Jack
Coleman, Donald


Ashton, Joe
Conlan, Bernard


Atkinson, N. (H'gey,)
Cox, T. (W'dsw'th, Toot'g)


Bagier, Gordon A.T.
Crawshaw, Richard


Barnett, Guy (Greenwich)
Crowther, Stan


Barnett, Rt Hon Joel (H'wd)
Cryer, Bob


Beith, A. J.
Cunliffe, Lawrence


Bennett, Andrew (St'kp't N)
Cunningham, G. (Islington S)


Bidwell, Sydney
Cunningham, Dr J. (W'h'n)


Booth, Rt Hon Albert
Dalyell, Tarn


Boothroyd, Miss Betty
Davidson, Arthur


Bottomley, Rt Hon A. (M'b'ro)
Davis, Clinton (Hackney C)


Bradley, Tom
Davis, Terry (B'ham, Stechf'd)


Bray, Dr Jeremy
Deakins, Eric


Brown, Hugh D. (Provan)
Dean, Joseph (Leeds West)


Brown, R. C. (N'castle W)
Dewar, Donald


Brown, Ronald W. (H'ckn'y S)
Dixon, Donald


Brown, Ron (E'burgh, Leith)
Dobson, Frank


Buchan, Norman
Dormand, Jack


Callaghan, Rt Hon J.
Dubs, Alfred


Callaghan, Jim (Midd't'n &amp; P)
Duffy, A. E. P.


Campbell, Ian
Dunnett, Jack


Campbell-Savours, Dale
Dunwoody, Hon Mrs G.


Cant, R. B.
Eadie, Alex





Eastham, Ken
Meacher, Michael


Edwards, R. (W'hampt'n S E)
Mikardo, Ian


Ellis, R. (NE D'bysh're)
Millan, Rt Hon Bruce


Ellis, Tom (Wrexham)
Miller, Dr M. S. (E Kilbride)


English, Michael
Morris, Rt Hon A. (W'shawe)


Ennals, Rt Hon David
Morris, Rt Hon C. (O'shaw)


Evans, John (Newton)
Morris, Rt Hon J. (Aberavon)


Ewing, Harry
Morton, George


Faulds, Andrew
Moyle, Rt Hon Roland


Field, Frank
Mulley, Rt Hon Frederick


Fitch, Alan
Newens, Stanley


Flannery, Martin
Oakes, Rt Hon Gordon


Forrester, John
Ogden, Eric


Foster, Derek
O' Halloran, Michael


Fraser, J. (Lamb'th, N'w'd)
O'Neill, Martin


Freeson, Rt Hon Reginald
Orme, Rt Hon Stanley


Freud, Clement
Park, George


Garrett, John (Norwich S)
Parker, John


Garrett, W. E. (Wallsend)
Parry, Robert


George, Bruce
Penhaligon, David


Ginsburg, David
Pitt, William Henry


Golding, John
Powell, Raymond (Ogmore)


Gourlay, Harry
Race, Reg


Graham, Ted
Radice, Giles


Grant, John (Islington C)
Rees, Rt Hon M (Leeds S)


Grimond, Rt Hon J.
Richardson, Jo


Hardy, Peter
Roberts, Albert (Normanton)


Harman, Harriet (Peckham)
Roberts, Allan (Bootle)


Harrison, Rt Hon Walter
Roberts, Ernest (Hackney N)


Hart, Rt Hon Dame Judith
Roberts, Gwilym (Cannock)


Hattersley, Rt Hon Roy
Robertson, George


Haynes, Frank
Robinson, G. (Coventry NW)


Heffer, Eric S.
Rodgers, Rt Hon William


Hogg, N. (E Dunb't'nshire)
Rooker, J. W.


Holland, S. (L'b'th, Vauxh'll)
Roper, John


Home Robertson, John
Ross, Ernest (Dundee West)


Homewood, William
Ross, Stephen (Isle of Wight)


Horam, John
Rowlands, Ted


Hoyle, Douglas
Sever, John


Huckfield, Les
Sheerman, Barry


Hudson Davies, Gwilym E.
Sheldon, Rt Hon R.


Hughes, Mark (Durham)
Shore, Rt Hon Peter


Hughes, Robert (Aberdeen N)
Short, Mrs Renée


Hughes, Roy (Newport)
Silkin, Rt Hon J. (Deptford)


Jay, Rt Hon Douglas
Silkin, Rt Hon S. C. (Dulwich)


John, Brynmor
Silverman, Julius


Johnson, James (Hull West)
Skinner, Dennis


Johnson, Walter (Derby S)
Smith, Cyril (Rochdale)


Jones, Rt Hon Alec (Rh'dda)
Smith, Rt Hon J. (N Lanark)


Jones, Dan (Burnley)
Snape, Peter


Kerr, Russell
Spellar, John Francis (B'ham)


Kilroy-Silk, Robert
Spriggs, Leslie


Lambie, David
Stallard, A. W.


Lamond, James
Steel, Rt Hon David


Leighton, Ronald
Stewart, Rt Hon D. (W Isles)


Lewis, Arthur (N'ham NW)
Stoddart, David


Lewis, Ron (Carlisle)
Stott, Roger


Litherland, Robert
Strang, Gavin


Lofthouse, Geoffrey
Straw, Jack


Lyon, Alexander (York)
Summerskill, Hon Dr Shirley


Lyons, Edward (Bradf'd W)
Thomas, Dafydd (Merioneth)


McCartney, Hugh
Thomas, Jeffrey (Abertillery)


McDonald, Dr Oonagh
Thomas, Mike (Newcastle E)


McElhone, Mrs Helen
Thomas, Dr R. (Carmarthen)


McGuire, Michael (Ince)
Thorne, Stan (Preston South)


McKay, Allen (Penistone)
Tilley, John


McKelvey, William
Tinn, James


MacKenzie, Rt Hon Gregor
Torney, Tom


Maclennan, Robert
Varley, Rt Hon Eric G.


McNally, Thomas
Wainwright, R. (Colne V)


McTaggart, Robert
Walker, Rt Hon H. (D'caster)


McWilliam, John
Warden, Gareth


Magee, Bryan
Weetch, Ken


Marks, Kenneth
Wellbeloved, James


Marshall, D (G'gow S'ton)
Welsh, Michael


Marshall, Dr Edmund (Goole)
White, J. (G'gow Pollok)


Marshall, Jim (Leicester S)
Whitehead, Phillip


Mason, Rt Hon Roy
Whitlock, William


Maxton, John
Wigley, Dafydd


Maynard, Miss Joan
Willey, Rt Hon Frederick






Williams, Rt Hon A. (S'sea W)
Wrigglesworth, Ian


Williams, Rt Hon Mrs (Crosby)
Wright, Sheila


Wilson, Gordon (Dundee E)
Young, David (Bolton E)


Wilson, William (C'try SE)



Winnick, David
Tellers for the Ayes:


Woodall, Alec
Mr. James Hamilton and


Woolmer, Kenneth
Mr. Harry Cowans.


NOES


Adley, Robert
Fairgrieve, Sir Russell


Alexander, Richard
Faith, Mrs Sheila


Alison, Rt Hon Michael
Farr, John


Amery, Rt Hon Julian
Fell, Sir Anthony


Ancram, Michael
Fenner, Mrs Peggy


Arnold, Tom
Finsberg, Geoffrey


Aspinwall, Jack
Fisher, Sir Nigel


Atkins, Robert (Preston N)
Fletcher, A. (Ed'nb'gh N)


Atkinson, David (B'm'th,E)
Forman, Nigel


Baker, Kenneth (St.M'bone)
Fowler, Rt Hon Norman


Baker, Nicholas (N Dorset)
Fraser, Peter (South Angus)


Beaumont-Dark, Anthony
Fry, Peter


Bendall, Vivian
Gardiner, George (Reigate)


Benyon, Thomas (A'don)
Gardner, Sir Edward


Benyon, W. (Buckingham)
Garel-Jones, Tristan


Berry, Hon Anthony
Gilmour, Rt Hon Sir Ian


Best, Keith
Goodhart, Sir Philip


Bevan, David Gilroy
Goodhew, Sir Victor


Biffen, Rt Hon John
Goodlad, Alastair


Biggs-Davison, Sir John
Gorst, John


Blackburn, John
Gow, Ian


Blaker, Peter
Gower, Sir Raymond


Body, Richard
Grant, Sir Anthony


Bonsor, Sir Nicholas
Gray, Rt Hon Hamish


Bottomley, Peter (W'wich W)
Greenway, Harry


Bowden, Andrew
Grieve, Percy


Boyson, Dr Rhodes
Griffiths, Peter (Portsm'th N)


Braine, Sir Bernard
Grist, Ian


Bright, Graham
Grylls, Michael


Brinton, Tim
Gummer, John Selwyn


Brittan, Rt. Hon. Leon
Hamilton, Hon A.


Brooke, Hon Peter
Hampson, Dr Keith


Brotherton, Michael
Hannam, John


Browne, John (Winchester)
Haselhurst, Alan


Bruce-Gardyne, John
Havers, Rt Hon Sir Michael


Bryan, Sir Paul
Hawkins, Sir Paul


Buchanan-Smith, Rt. Hon. A.
Hawksley, Warren


Buck, Antony
Hayhoe, Barney


Budgen, Nick
Heath, Rt Hon Edward


Bulmer, Esmond
Heddle, John


Butcher, John
Henderson, Barry


Carlisle, John (Luton West)
Heseltine, Rt Hon Michael


Carlisle, Kenneth (Lincoln)
Hicks, Robert


Carlisle, Rt Hon M. (R'c'n)
Higgins, Rt Hon Terence L.


Channon, Rt. Hon. Paul
Hill, James


Chapman, Sydney
Hogg, Hon Douglas (Gr'th'm)


Churchill, W. S.
Holland, Philip (Carlton)


Clark, Hon A. (Plym'th, S'n)
Hooson, Tom


Clark, Sir W. (Croydon S)
Howe, Rt Hon Sir Geoffrey


Clegg, Sir Walter
Howell, Rt Hon D. (G'Idf'd)


Cockeram, Eric
Howell, Ralph (N Norfolk)


Colvin, Michael
Hunt, David (Wirral)


Cope, John
Hunt, John (Ravensbourne)


Corrie, John
Hurd, Rt Hon Douglas


Costain, Sir Albert
Irvine, Rt Hon Bryant Godman


Cranborne, Viscount
Irving, Charles (Cheltenham)


Critchley, Julian
Jessel, Toby


Crouch, David
Johnson Smith, Sir Geoffrey


Dickens, Geoffrey
Jopling, Rt Hon Michael


Dorrell, Stephen
Kaberry, Sir Donald


Douglas-Hamilton, Lord J.
Kellett-Bowman, Mrs Elaine


Dover, Denshore
Kimball, Sir Marcus


Dunn, Robert (Dartford)
King, Rt Hon Tom


Durant, Tony
Kitson, Sir Timothy


Eden, Rt Hon Sir John
Knight, Mrs Jill


Edwards, Rt Hon N. (P'broke)
Knox, David


Eggar, Tim
Lamont, Norman


Elliott, Sir William
Lang, Ian


Emery, Sir Peter
Langford-Holt, Sir John


Eyre, Reginald
Latham, Michael


Fairbairn, Nicholas
Lawrence, Ivan





Lawson, Rt Hon Nigel
Rifkind, Malcolm


Lee, John
Rippon, Rt Hon Geoffrey


Le Marchant, Spencer
Roberts, M. (Cardiff NW)


Lennox-Boyd, Hon Mark
Roberts, Wyn (Conway)


Lewis, Sir Kenneth (Rutland)
Rossi, Hugh


Lloyd, Ian (Havant &amp; W'loo)
Rost, Peter


Lloyd, Peter (Fareham)
Rumbold, Mrs A. C. R.


Loveridge, John
Sainsbury, Hon Timothy


Lyell, Nicholas
St. John-Stevas, Rt Hon N.


Mabon, Rt Hon Dr J. Dickson
Shaw, Giles (Pudsey)


McCrindle, Robert
Shaw, Sir Michael (Scarb')


Macfarlane, Neil
Shelton, William (Streatham)


MacGregor, John
Shepherd, Colin (Hereford)


MacKay, John (Argyll)
Shepherd, Richard


Macmillan, Rt Hon M,
Shersby, Michael


McNair-Wilson, M. (N'bury)
Silvester, Fred


McNair-Wilson, P. (New F'st)
Skeet, T. H. H.


McQuarrie, Albert
Smith, Dudley


Madel, David
Smith, Tim (Beaconsfield)


Major, John
Speed, Keith


Marland, Paul
Speller, Tony


Marlow, Antony
Spence, John


Marshall, Michael (Arundel)
Spicer, Jim (West Dorset)


Marten, Rt Hon Neil
Spicer, Michael (S Worcs)


Mates, Michael
Sproat, Iain


Maude, Rt Hon Sir Angus
Squire, Robin


Maw by, Ray
Stainton, Keith


Mawhinney, Dr Brian
Stan brook, Ivor


Maxwell-Hyslop, Robin
Stanley, John


Mayhew, Patrick
Steen, Anthony


Meyer, Sir Anthony
Stevens, Martin


Miller, Hal (B'grove)
Stewart, A.(E Renfrewshire)


Mills, Iain (Meriden)
Stewart, Ian (Hitchin)


Mills, Sir Peter (West Devon)
Stokes, John


Miscampbell, Norman
Stradling Thomas, J.


Mitchell, David (Basingstoke)
Tapsell, Peter


Moate, Roger
Tebbit, Rt Hon Norman


Monro, Sir Hector
Temple-Morris, Peter


Montgomery, Fergus
Thatcher, Rt Hon Mrs M.


Moore, John
Thomas, Rt Hon Peter


Morgan, Geraint
Thompson, Donald


Morris, M. (N'hampton S)
Thornton, Malcolm


Morrison, Hon C. (Devizes)
Townend, John (Bridlington)


Murphy, Christopher
Trippier, David


Myles, David
Trotter, Neville


Neale, Gerrard
van Straubenzee, Sir W.


Needham, Richard
Vaughan, Dr Gerard


Neubert, Michael
Viggers, Peter


Newton, Tony
Waddington, David


Normanton, Tom
Wakeham, John


Nott, Rt Hon Sir John
Waldegrave, Hon William


Onslow, Cranley
Walker, Rt Hon P. (W'cester)


Oppenheim, Rt Hon Mrs S.
Walker, B. (Perth)


Osborn, John
Walker-Smith, Rt Hon Sir D.


Page, John (Harrow, West)
Wall, Sir Patrick


Page, Richard (SW Herts)
Waller, Gary


Parris, Matthew
Walters, Dennis


Patten, Christopher (Bath)
Warren, Kenneth


Pattie, Geoffrey
Watson, John


Pawsey, James
Wells, John (Maidstone)


Percival, Sir Ian
Wheeler, John


Peyton, Rt Hon John
Whitelaw, Rt Hon William


Pollock, Alexander
Whitney, Raymond


Porter, Barry
Wickenden, Keith


Prentice, Rt Hon Reg
Wiggin, Jerry


Price, Sir David (Eastleigh)
Wilkinson, John


Prior, Rt Hon James
Williams, D. (Montgomery)


Proctor, K. Harvey
Winterton, Nicholas


Pym, Rt Hon Francis
Wolfson, Mark


Rathbone, Tim
Young, Sir George (Acton)


Rees-Davies, W. R.
Younger, Rt Hon George


Renton, Tim



Rhodes James, Robert
Tellers for the Noes:


Rhys Williams, Sir Brandon
Mr. Carol Mather and


Ridley, Hon Nicholas
Mr. Robert Boscawen.

Question accordingly negatived.

Clause 1

INTERPRETATION OF PART I

Amendment made: No. 1, in page 1, line 14, leave out 'in England or Wales'.—[Mr. Eyre.]

Mr. Robert Hughes: I beg to move amendment No. 2, in page 2, line 6, at end insert—
'"revenues" includes sums received by way of revenue grants, payments made in accordance with the power contained in section 138 of the Act of 1968 or section 40 of the Act of 1969.'.

Mr. Deputy Speaker: With this we may take Government amendment No. 3.

Mr. Hughes: It is important to note the way in which the amendment has been drafted. The comma is important, because it seeks to make it clear that revenue grants are distinct from payments made in accordance with the powers under section 138 of the 1968 Act or section 40 of the 1969 Act—those being the sections under which payments can be made for concessionary fares.
One reason why we need a proper definition of the word "revenues" is that the Government failed to define it properly when they originally drafted the Bill. As we are dealing with a Bill that seeks to clarify the law, we wonder how much it does that when a basic concept such as revenues cannot be properly defined in primary legislation. It does not say much for the Government's control over the parliamentary draftsmen or their scrutiny of Bills presented to the House. They should have produced a Bill that adequately defined "revenues".
We understand that payments made for concessionary fares must appear somewhere in the accounts of a PTE. They cannot be left out—for bookkeeping purposes, if for no other. If they do not appear, the accounts will not balance. The difficulty is that once the payments for concessionary fares are brought into the accounts, how will they be protected from threat or attack?
The Government have repeated ad nauseam that nothing in the Bill affects concessionary fares for the elderly, children and young persons, the blind and the disabled. We believe that the Bill is a threat to concessionary fares and, indeed, to the services to those for whose benefit there is a payment on concessionary fares.
In the first instance, there will be pressure on the PTA's budget by the Secretary of State's setting of the protected expenditure level. If payments on concessionary fares are regarded as grants, the Secretary of State will have an influence on the amount of money provided for concessionary fares. I understand and accept in good faith that it is not the right hon. Gentleman's intention directly to influence the amount of money that can be paid for concessionary fares, but, nevertheless, the actions that he will take under the Bill will squeeze local authority funds for concessionary fares.
No one in the House or in the country is beguiled by the Secretay of State's statement that he is seeking to clarify the law for local authorities. That is not the purpose. The aim of the Bill—the Secretary of State has been clear about it—is to compel the PTAs to push up fares. The purpose is to cut the amount of money they give to revenue support, which, if it is done, means that they must increase the fares. That is his intention. If fares are

increased, and since in many cases the support for concessionary fares is paid by district councils, it will mean that the higher the fares the greater the amount of money the district council will have to find. The concessionary fare is decided at a certain level, and the difference between that level and the scheduled bus fare must be met by someone or other. If that money is increased, it must come from somewhere.
We are not dealing with transport in isolation from what is happening in other local authority services. Under the fiduciary scheme of the former Secretary of State for the Environment, who has been now transposed to Defence—heaven help us—local authority finances are being squeezed as every year goes by. They are severely limited in the amount of money that they can spend. If they are under threat, they are bound to ask, "Can we afford the amount of concessionary fares?" That is one way in which the authorities could be squeezed.
The Secretary of State could say that in his view the amount of concessionary fares is too low. He need not say that he has no right to advise or guide the PTAs or the PTEs in that matter, because clearly he has. The Bill says that they must take into account any guidance that he gives them on any matter. Clause 4(6) states:
The matters by reference to which the guidance of the Secretary of State under subsection (5) above may be given shall include—

(a) what appears to him to be the appropriate national level of expenditure by Authorities on revenue grants;
(b) the benefits which would result from the making of such grants; and
(c) the levels of present and past expenditure by the Authority on such grants;"

The Secretary of State will be able to interfere with everything that a PTA seeks to do and every policy decision that it seeks to make. As one of the major policy decisions that it will have under review is the level of concessionary fares, we believe that as long as it is not clear that payments under section 138 or section 40 are separate from the protected expenditure level, again, the dead hand of the Secretary of State will fall and will compel the reduction, if not the eventual elimination, of concessionary fares.
I know that the Secretary of State has objected to and that some of his hon. Friends have shown considerable ingenuity in remaining in order by quoting, leaflets that have been distributed, but we are not scaremongering on this issue. As the Bill stands, the Secretary of State can tell a PTA that its concessionary fare is too low and that it is not generating revenue from pensioners or the blind and disabled. If that advice is given and is challenged in the courts, it may be that that advice will be the difference between a PTA being within the law and outwith the law.
Amendment No. 2 would remove the threat to concessionary fares. I urge the Under-Secretary of State to make a name for himself, protect the good name and reputation of his Government and accept our amendment.

Mr. Eyre: I am surprised that the hon. Member for Aberdeen, North (Mr. Hughes) spoke as he did about concessionary fares. On many occasions in Committee we discussed this matter at great length and it has been explained many times to the hon. Gentleman that concessionary fares are not affected by the Bill.
Anxiety has been expressed that concessionary fares for the elderly and disabled will have to be withdrawn as a consequence of the Bill. Tyne and Wear county council, in a misleading leaflet given to members of the public, has


claimed that concessionary fares are threatened by the Bill. That must have caused great concern among the elderly and disabled. The remarks of the hon. Member for Aberdeen, North this evening come into that category because they, too, will cause concern. The allegation is completely untrue.
I should like to make the position clear once and for all. The powers under which authorities pay for the concessions for the elderly and disabled are not affected by the Bill. The Government fully accept the need for concessionary fares. That is why, when the power of the GLC to provide concessionary fares was thrown in doubt by the House of Lords judgment, the Government took immediate steps to provide it with the necessary powers.

Mr. Robert Hughes: The Minister is reading from a six-month-old brief when he says that the Government took immediate action. The Government did not take immediate action. When the Opposition said that the House of Lords decision threw into question the ability of the GLC to make concessionary fares, it was denied time after time and only when pressed did the Government fianlly introduce legislation. We applauded the Government when they did so but they did not do it immediately.

Mr. Eyre: I shall not go over the history with the hon. Gentleman but the Government moved rapidly to deal with the problem in London and introduced legislation specially to correct the position. I maintain that my claim was altogether fair.
We have drafted the Bill so that it does not affect the powers of authorities to provide concessionary fares. Payments by authorities for concessions under existing powers will remain entirely a matter for the authorities. These are social payments aided by the Government to the rate support grant system. They are therefore not eligible for transport supplementary grant. There will be no need for authorities to change their concessionary fares on account of the Bill.
Tyne and Wear's document was a deplorable effort. The way in which the document alleges publicly that the Bill will mean the end of concessionary travel for senior citizens, the blind and the disabled is completely misleading and inaccurate. I should like to refer more specifically to the amendment.

Miss Maynard: The point we are trying to make is that concessionary fares are part of the local authority's expenditure. The question of subsidy is obviously part of that consideration. The Bill will establish guidelines under which concessionary fares may well be affected.

Mr. Eyre: This matter was discussed a number of times in Committee. I would not accuse the hon. Member for Sheffield, Brightside (Miss Maynard) of using weasel words. The hon. Lady is, however, expressing an unreasonable concern. I have emphasised that concession-ary fares and the arrangements about them are outside the Bill and are not affected by the Bill. They are social payments which are supported by the rate support grant. Payments of money in that respect are outside the protected expenditure level to which the hon. Lady was referring. They provide funds additional to the protected expenditure level.
The purpose of the Bill is to clarify the law and to stabilise the situation by creating an area of certainty for

transport expenditure, thereby freeing local authorities from the danger of challenge in the courts in respect of that area of certainty. The Bill gives an opportunity for consistency and for the provision of transport services on a stabilised basis. This is as much in the interests of the elderly and the disabled as of any other group of passengers. I reassure the hon. Lady as strongly as I can that the fears which she has expressed are not justified and that the Bill does not affect concessionary fares.
The amendment is unnecessary and unwise. The revenues of an executive include all payments properly credited to the revenue account. The term "revenues" clearly includes payment for services provided to the elderly and disabled mentioned in the amendment. If we start identifying particular payments as being part of the revenues, we shall cause confusion, not remove it. It would cast doubt on the status of items that are not mentioned, of which there are many.
I should now like to refer to Government amendment No. 3. The Government promised in Committee, in response to concern expressed by Opposition Members, to table an amendment on Report to remove any possibility of uncertainty that revenue grants, as defined in clause 1, are part of the executive's revenue. The grants are part of the revenue for the purpose of the new financial duty. This is normal accounting practice. Such treatment has always been our intention. We promised to remove any uncertainty. I hope that Opposition Members find the clarification helpful.

Mr. Booth: One can understand why the Under-Secretary of State argues that the provision of concessionary fares covered by section 138 is outwith the protected expenditure limit. In the strictest of legal terms, that is so. However, the hon. Gentleman cannot elevate that argument into a claim that the Bill sustains and stabilises the provision of concessionary fare services. It is clear from the guidance already issued by the Secretary of State that those metropolitan authorities that have offered the best concessionary fare services to people within their areas who need them will be those that will have their revenue grant support most severely restricted.
I take South Yorkshire as an example. It has a record of expanding services and a substantial payment for operating concessionary fares. It is clear, according to the definition of revenue in amendment No. 2, that those keeping the books of the passenger transport executive must include within revenue the payments made under section 138 for concessionary fares. While payments of revenue grant, subject to the PEL, will be an additional or separate item on the income side, the ability of the PTE to run the services required, including those for people who pay concessionary fares, is controlled to a substantial degree—I would argue to a crucial degree—by the total amount of revenue grant.
It does not matter whether the revenue grant contains the section 138 payments within its definition. What is far more important is that the total revenue available to the PTE to run services should be stabilised, maintained or expanded. It has been made clear by the Secretary of State that he has no intention of sustaining that overall figure in the operation of the Bill if it becomes an Act. On the contrary, the right hon. Gentleman has made it clear that he will cut the figure. He intends to slash it. There will be only a limited number of options open to those authorities placed in this situation.
One option will be to cut the services to a point where they could be sustained with reduced revenue under current fares policy. That will, of course, strike at concessionary fare users. They will suffer from the drop in service levels. Another option will be to attempt to press up fares to try to recover the loss of revenue grant. However, all the evidence suggests that there will be such a drop in ridership among travellers who do not benefit from concessionary fares that authorities, like others that have attempted to follow this course, will be forced into a cycle of cutting services.
The issue before the House is not one of narrow legal definition. When metropolitan authorities say to those living in the area—in my view, justifiably—that the services for concessionary farepayers are at risk, this is not because the Government are including, within their definition of revenue grant, matters that exclude section 138 payments, but because the authorities are far more concerned about the practical issue of their ability to maintain the services. It is undeniable that, under this legislation, the ability to maintain services, especially by those metropolitan authorities with the best record, must be gravely undermined, weakened and, in many cases, reduced to such an extent that they will not be able to retain those services.

Mr. Les Huckfield: I want to reinforce a point made by my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth). I am sure that the Minister will recognise its particular significance in the west midlands and his constituency. He will know that during the reduced fares period, before the West Midlands High Court case, there was a study of the increase in ridership during that period. It was a study not just of the increase in ridership occasioned directly by the decrease in fares, but of the increase in ridership because of the 2p concessionary fare that had been made available to children and old-age pensioners.
I take it that the Minister has read that study. It was done by two interested academics from the university of Aston in Birmingham. It established clearly that it is not just the overall decrease in fares that is important in attracting an increase in overall ridership, but that a big increase in ridership is occasioned by childrens' and old-age pensioners' concessions. He has the evidence from the west midlands to prove that.
I do not want to go into all the comments made in that survey, but it shows—if I may use an economist's phrase—that the elasticity of the demand is high with old-age pensioners and children's concessionary fares. There is evidence to show that with a small reduction in fares there is a big increase in ridership.
If my right hon. Friends and I are perhaps a little too assiduous, in the Minister's eyes, in pressing that point, it is because we realise that it is a valued fares concession. There is another reason why we seek to hammer home the point again tonight. Following the judgment in another place on the GLC's "Fares Fair" policy, I recollect, and I am sure that the Minister can, that his right hon. Friend the Secretary of State said two things. First, he said that we had no need to worry about concessionary fares, that they were all right, protected and not affected by the judgment; and, secondly, that we need not worry about the

metropolitan county councils and passenger transport executives in other parts of the country because they were wholly different.
At that time, various of my right hon. and hon. Friends made the point that the Government would need to introduce legislation to protect concessionary fares. We said that the judgment that had been given in another place affected provincial metropolitan county councils. That was pooh-poohed by the Government. They said that concessionary fares were all right and not affected by that judgment and that metropolitan county councils were covered by different legislation and therefore we need not worry.
In the end, the Government did not just have to introduce a Bill to protect concessionary fares in London. They have been forced to alter their ideas on legislation governing the metropolitan county councils. It became worse, because to continue with any fares policy in London the GLC had to have a letter from the right hon. and learned Gentleman the Attorney-General saying that it was all right in his eyes for it to continue with a fares policy after "Fares Fair".
All hon. Members who know the Minister, know that he is sincere. He also reads his briefs well. I do not doubt that he has come to the Dispatch Box with the most accurate and reliable information at his disposal, but, unfortunately, so did his right hon. Friend the Secretary of State following the "Fares Fair" judgment in another place.
We are pressing the amendment because we are still uncertain and want to protect the revenue grant for concessionary fares beyond doubt and peradventure. I recognise that the Minister and the Secretary of State have gone a little way towards doing that in their amendment, but the Secretary of State has felt the need to start writing publicly to people up and down the country because he can see that they are worried.
All my hon. Friends from Tyne and Wear, Merseyside and Greater Manchester know that the Secretary of State has been forced to write his celebrated open letter to the local press and local Conservative Members saying that there is no need to worry about the concessionary fares. However, there is a great deal of anxiety felt about the lack of protection which, in some people's eyes, the Bill affords to concessionary fares.
I hope that the Minister will understand that, having had a fair old argument in Committee about this, many Opposition Members are still not happy with the form of the amendment that he has presented. We still feel that it needs to have the kind of "belt and braces" substance that is contained in our amendment. I hope that the Minister understands that he still has a long way to go to satisfy my right hon. Friends and myself.

Mr. Martin Stevens: I wish to comment upon the latter words of the hon. Member for Nuneaton (Mr. Huckfield) in advancing his proposition. The Minister is always charming, emollient and overflowing with good faith, but I propose to be a little more tart and thorny in my comments upon the metropolitan authorities' conduct.
It became necessary for my right hon. Friend the Secretary of State to introduce legislation on concession-ary fares, because the lawyers advising the GLC took a


different view of the significance of the House of Lords decision from that taken by the lawyers advising London Transport or those advising my right hon. Friend.
Disputes between lawyers may lead us to take the view that we need to wear a belt and braces. At all events, my right hon. Friend introduced his measure to ensure that there would not be a scintilla of doubt about the law's meaning. Conservative Members are in no doubt that the attitude of the leaders of the GLC was mischievous and tendentious. They were not acting in good faith. They were seeking to pick an unnecessary quarrel to make a cheap, divisive political point as a result of which the citizens of London have come off worse.
The advice that my right hon. Friend gave the House about concessionary fares resulting from the House of Lords decision was, in my view, perfectly correct. It was necessary to legislate only because the GLC chose not to accept what was manifestly the thrust of the House of Lords judgment.

Mr. Robert Hughes: As to the speech of the hon. Member for Fulham (Mr. Stevens), the least said, soonest mended. He knows perfectly well that the only reason why a legal challenge was mounted against the GLC was that a couple of drunken Tory golfers got together in a club in Bromley and started arguing about whether the scheme was legal. The leader of the Tories in the GLC did not challenge the legality of the "Fares Fair" policy when the matter was debated. If we are in a mess with the House of Lords, it is because of historical accident.

Mr. Stevens: The hon. Gentleman has been rather strict with me, so I can be rather strict with him. It does not matter how many drunken Tories, although I refuse to accept that such a species exists, brought actions against the GLC or anyone else. What matters is what the law says, and in this case, in three courts, seven out of nine judges or nine out of 11—the overwhelming majority—concluded that the GLC had acted illegally. That was neither political nor, I hope, were they drunk. It was the operation of the law that Opposition Members rejected.

Mr. Hughes: I cast no aspersions on the sobriety or otherwise of the judges in any court. Unfortunately, this Bill does not clarify the law. Far from producing legislation where there is not a scintilla of doubt, there is a rolling fog of doubt about where the law stands. That has worried us throughout the debate. The trouble is that we must take the Secretary of State at his word. We know that the constraint under which the passenger transport authorities are operating is that the transport supplementary grant has been cut this year. They are receiving less this year than they did last year. Faced with those circumstances, there is no doubt that concessionary fares are threatened.
So certain was everyone of the law that it was only in Committee that the Government discovered that the metropolitan counties had no power to grant concessionary fares, although they had been doing so for a long time. Someone forgot to include it in an Act. The Under-Secretary of State cannot say with such certainty that the law is now absolutely clear and that no one need bother about where it stands.
I listened carefully to what the hon. Gentlemen said, and I believe that, legally, the payment made for

concessionary fares is additional to the protected expenditure level. In the interests of time, therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 3, in page 2 line 11 at end insert
',and accordingly references to the revenues of an Executive include references to sums received by way of revenue grants'. —[Mr. Eyre.]

Clause 2

FINANCIAL DUTY OF EXECUTIVES

Mr. Eyre: I beg to move amendment No. 4. in page 2, line 22, leave out from "charges " to end of line 24 and insert
subsection (1) above shall have effect in relation to the next following accounting period as if the combined charges there referred to included an amount equal to the amount of the deficit.".

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 5, 38 and 39.

Mr. Eyre: Amendment No. 4 is a clarifying amendment. It is intended to make it clear that an executive is under a duty to make good any deficit incurred in the previous accounting period. The only exception to that duty relates to a deficit that is covered by the planned appropriation of reserves as provided by clause 2(3). However, we shall deal with that in a subsequent amendment.
Amended subsection (2) will make it clear that in the year following one in which a deficit is created, the repayment of the deficit is to form an integral part of the executive's duty to break even. That duty is always subject, as is the duty in clause 2(1), to the phrase
so far as is practicable",
and the requirement to repay a deficit is to be achieved by making the deficit a charge on the accounts for the following year. If the executive then fails to break even in that subsequent year, it cannot lose the deficit from the earlier period. What will be required in practice is that the repayment of a deficit must be a charge on an executive's account in a new financial year. Then the executive must comply with its duty to break even. It must, so far as is practicable, achieve enough revenue, including grant, to offset its costs and any deficit brought forward from the previous years. If, at the end of the year, the account is again in deficit, it will be a new deficit carried forward for repayment in the following year.
The purpose of Government amendment No. 5 is to clarify the meaning of clause 2(3) and to achieve its intended purpose. The amendment will replace the phrase
making good out of other funds
with the phrase "the appropriation of reserves". That will make it clear that where a deficit or part of a deficit is covered by the appropriation of reserves proposed in a clause 3 plan, approved by the authority under clause 4, the duty under clause 2(2) to make good that deficit or that part of a deficit is disapplied. In other words, an executive can use reserves to cover a deficit.
Clause 2(3), as originally drafted, allowed for the planned use of other funds in association with the technical deficit after that deficit had been incurred and without then having to make good the deficit in the following year. It did not enable the executive to plan to use reserves in place


of revenue grants and in consequence to run a technical deficit. As executives are likely to wish to plan to use and then actually to use reserves, this amendment allows them to do so. Therefore, the amendment makes it clear that where the use of reserves is planned, and the reserves are then so used, the duty under clause 2(1) to break even is disapplied in relation to that planned use of reserves.
Under clause 2(3) as amended it will be clear that an executive could plan to appropriate reserves and to run the associated deficit provided that the use of reserves is proposed and authorised in a plan prepared by the executive under clause 3 and approved by the authority under clause 4. I was hoping that the hon. Member for Keighley (Mr. Cryer) would bear with me for a moment and remain in the Chamber, because the points that I am making are relevant to one point that he raised recently. The authority and executive can agree and use reserves in substitution for revenue grant.
I am grateful to the hon. Member for Keighley for returning to the Chamber. The hon. Gentleman alleged that passenger transport executives cannot buy new buses with their reserves, but there is nothing in the Bill to prevent passenger transport executives from using their reserves for capital expenditure, which includes the purchase of buses. Protected expenditure limits relate only to the revenue branch. If a passenger transport executive accumulates a surplus—one must emphasise that so far they are not profit-making organisations—it must do so at the expense of the ratepayers. If it accumulates a reserve, that reserve would be valid for the purchase of Leyland buses, to which the hon. Gentleman referred, and I would be as keen on their buying as many Leyland buses as they justifiably can. I know that the hon. Gentleman would be happy if they could do so.

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Mr. Cryer: I am grateful for that clarification. Will the Minister also confirm that a PTA could use the money from surpluses to offset revenue in the following year to give further support to the bus services without that money being taken into account by the Secretary of State for the guidelines?

Mr. Eyre: The use of expenditure for revenue support—as distinct from capital spending, which the hon. Gentleman raised and on which I was happy to be able to produce such a good answer—can be done only on the basis of having been duly authorised under the planning process and having come within the PEL.
I referred to an authority and executive being able to agree and use reserves in substitution for revenue grant. There is also an amendment to clause 10 that will have the same effect for 1983–84 when there is no plan submitted under clause 4. However, we shall see that in a subsequent amendment.
Amendment No. 38 is included in this group and it would be for the convenience of the House if I were to explain the situation there. As the House knows, the Government are concerned that the Bill should be on the statute book by 1 April. Although the executives and authorities will not have prepared a plan for 1983–84 we intend that authorities should only be able to make revenue grants in the coming year if they have first made a determination as to the total of grants to be made. That is

what clause 10(2) is intended to achieve. We had thought that the original drafting of this subsection made that clear but some doubts were expressed by Labour Members in Committee. Therefore, we made an amendment in Committee to make it absolutely clear that revenue grants for 1983–84 could be made only in accordance with the determination by the authority.
We are equally concerned that that determination should be made only in the light of guidance given by the Secretary of State. We have already announced initial guidance in the White Paper entitled "Public Transport Subsidy in Cities". We have since had discussions with most of the authorities concerned. We have looked again at the wording of clause 10(2) and have tabled this amendment to make it quite clear that authorities can only make a grant determination for 1983–84 when they have both received final guidance from the Secretary of State and also taken that guidance into account. The amendment in no way alters the spirit of the clause, but it makes it clear what is intended. Authorities will still be able to exceed the guidance if they wish, but the amendment will make clear the process to be followed if the authority is to comply with the law and, if it wishes, adopt the protection provided by clause 5(2) without, in 1983–84, having first gone through the planning cycle.
Because there was some misunderstanding on this point in Committee I shall reassure the House that the protection provided by clause 5(2) is brought into general effect on 1 April 1984, but it is also brought into effect for 1983–84 by clause 10(3) where authorities have followed the procedure in clause 10(2). The amendment is also to some extent consequential upon amendment No. 39 which will allow the use of reserves in 1983–84 to cover a deficit provided that such use of reserves has been notified to the Secretary of State before he issues his guidance. Although it does not explicitly say so, the amendment will in practice allow a brief period for completion of consultation before the guidance for 1983–84 is announced, and will enable the executive to notify the Secretary of State of any intention to use reserves.
I am grateful to the hon. Member for Penistone (Mr. McKay) for drawing the attention of the Standing Committee to the need for provison in clause 10 for the use of reserves in 1983–84, which drew the Government's attention to the need for this further clarification in clause 10(2). I am sorry that the hon. Gentleman has left the Chamber for a few moments. The amendment clarifies how clause 10(2) will operate and, therefore, how the protection of clause 5(2) is to be provided in 1983–84. That is in everybody's interest, not least of the executives, the authorities and the transport users who can benefit from the legal certainty available by complying with the Bill's requirements.
The House will recall that an amendment was made earlier to clarify the provision of clause 2(3) for the executives to use reserves to cover deficits provided that such use of reserves had been proposed in the plan approved by the authority. The hon. Member for Penistone helpfully pointed out in Committee when we touched on this subject that clause 2(3) only operates in relation to a plan and there will, of course, be no plan for 1983–84. Therefore, a specific provision is necessary to enable the planned use of reserves in 1983–84. In respect of such use we need to disapply the duty to break even—clause 2(1)—and the duty to make good a deficit in the following year—clause 2(2). That is the purpose of amendment No.


39 which requires the executives to notify the Secretary of State of any intention to use reserves before he gives his guidance to the authorities.
I believe that those amendments and the statements that I have made will helpfully clarify the situation and I hope that Labour Members will find the amendments of assistance.

Mr. Booth: I wish to speak to Government amendments Nos. 38 and 39 as they both raise serious and difficult issues for the passenger transport authorities. Before I do so, may I say that the Minister has just asserted—and it would appear to agree with the Bill's provisions—that section 5 will not operate until 1 April 1984, which follows from clause 10(1)(c). If that is the case, surely the local authorities cannot come to an arrangement with the Secretary of State in respect of 1983–84 on the basis that that will provide them with the protection of clause 5(2) which is not in operation for that year. Therefore, if they are faced with a challenge during that year they surely cannot argue in their defence that they have come to a suitable arrangement with the Secretary of State and are living within the protected expenditure limits which he has issued in guidance under the provisions of clause 10(2).
Amendment No. 38 bites upon that part of the Bill. The Bill provides:
An Authority shall not make any revenue grant in the year beginning on 1st April 1983 except in accordance with a determination made by them after the passing of this Act as to the amount of the revenue grants to be made by them in that year".
The amendment adds that they cannot make such a determinatin unless they have been given guidance by the Secretary of State after the passing of the Act. The effect of this is to put a block upon the payments by PTAs to their PTEs from the time of the passing of the Act until they get the formal guidance. It would be illegal to make a payment to a PTE without a determination, and if we pass the amendment it would be illegal to make the determination without having received the guidance.
The Government are asking for an effective blocking mechanism on payments if PTAs chose to operate it that way. Even if the Secretary of State wished to facilitate authorities that carried out their present statutory duty under the Bill and who were keen to do so—there cannot be many of them—I contend that the Secretary of State is under a legal obligation to consider the matter of his guidance, to be issued after the Bill is passed, in accordance with all the issues that he has to take into account in deciding upon that guidance.
The Secretary of State has to consider any fresh evidence that has been put to him and any representations that have been made to him. For him to issue that guidance without having done that would leave him open to charge. These processes of consideration of something as complex as the transport plan of a metropolitan authority are bound to require careful consideration, particularly if the Secretary of State is to stay within the manpower forecasts in the Bill.
I find it hard to see how, with the limited manpower forecast contained in the memorandum of the Bill, it will be possible for the Secretary of State to examine all the plans of all the metropolitan authorities in the detail that is necessary to issue guidance as to what their protected expenditure level should be and how they should make

their plans accordingly. During the time of this process of consideration, the PTE will presumably have to await payment from the PTA.
If the Secretary of State does not consider all these matters, after he has received these powers with the passing of the Bill as an Act, presumably he can be successfully sued by metropolitan authorities for failure to do so. The Secretary of State for the Environment had a case brought against him a few months ago because he failed to take matters properly into account in the determination of the rate support grant. I am certain that the Secretary of State of Transport does not wish to be involved in a parallel case over his guidance in the setting of protected expenditure limits.
Therefore, it is clear that to pass amendment No. 38 could lead to considerable difficulties and would undoubtedly give the Secretary of State power to hold up payments. He would be able to argue, properly, that he was taking time to consider properly the matters that he should take into account before issuing the guidance. He would have to tell metropolitan authorities and the PTAs that Parliament had decided that it was not proper for them to make payments until they had considered his guidance and that they would have to wait until they had it.
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One might be prepared to consider some way of streamlining that process if the absence of an amendment on these lines in the Bill created a problem. I listened to the Under-Secretary of State in the hope of hearing some argument for the necessity of the amendment. No such argument has been advanced. It has merely been claimed that it makes the Bill clearer. One would think, in view of all the claims that have been advanced during the proceedings of the Bill about clarification, that we had a Bill that was crystal clear from end to end and would probably be the textbook guide to future generations for the first class in a study of statute registration. It could be claimed that the Bill was a simple one that anybody could read because the House of Commons at every wage was advised by the Government as to the changes it could make to make the Bill clearer. I fear that instead it will be a textbook for those who wish to see how legislation can lead to a series of complex legal cases and can throw an important part of local government into confusion.
The absence from the Bill of amendment No. 38 would not create any problems. The justification in advance, that it would bring section 5 protection, cannot apply to the first year in any case, and it is only the first year that comes within this peculiar set of provisions. After the first year, the planning process is in operation and section 5 is in operation. A problem is not created because the PTA can pay on the basis of a determination that it has previously made, irrespective of the Secretary of State not having issued a final guidance, even if we do not pass amendment No. 38. In making that determination, the local authority will have to take into account all its legal obligations and statutory duties.
Amendment No. 38 can create a serious problem and will do nothing to solve any of the difficulties created by the Bill. Unless we hear some further explanation that shows that it has some merit hitherto undisclosed, I shall, at the appropriate time, advise my hon. Friends to oppose amendment No. 38.
Amendment No. 39 clearly applies only to the first financial year, 1983–84. It seeks to define the


circumstances in which reserves accumulated in 1982–83 can be used in the year 1983–84. The Secretary of State has already said, in advance of the passing of the Bill, that he agrees that the reserves of certain metropolitan authorities can be used without this affecting the protected expenditure level figure that he will include in his guidance.
I cite as evidence of this a letter sent to Mr. R. G. Brooke, chief executive of the West Yorkshire metropolitan county council on 21 January 1983 from Mrs. J. Bridgeman at the Department of Transport. The second paragraph read:
I am happy to be able to confirm that in the event of the Council transferring the sums proposed (£3·2 million and £0·6 million) from reserves, he"—
the Secretary of State—
will not regard that particular transfer as affecting the amount which he will give in his guidance as the appropriate level of revenue support for 1983–84.".
The Secretary of State has made it clear in the case of West Yorkshire that he is willing to allow that authority to use its reserves in a particular way without affecting its protected expenditure level in the guidance—to whatever extent that may be of importance, given that section 5 will not be in operation in that year. I understand, although I have not the correspondence to prove it, that there has been a similar communication in the case of Tyne and Wear. A bargain can be struck with the Secretary of State whereby those two metropolitan authorities will be able to spend in 1983–84 part of the reserves accumulated from the 1982–83 operation without that having any bearing on the protected expenditure level that the Secretary of State will set for 1983–84 if the Bill becomes law.
Amendment No. 39, however, is not a general application of what apparently has been agreed with two metropolitan authorities. There is no condition attached to amendment No. 39 giving an assurance that the expenditure of reserves would go forward in a way which would not affect the protected expenditure level. What is more, amendment No. 39 adds to the arrangement that has been made apparently with West Yorkshire and possibly with Tyne and Wear.
A further condition is that authorities that seek to spend their reserves after the Bill becomes an Act must notify the Secretary of State of their intention before he gives his final guidance. If they notify the Secretary of State of their intention, he then has a right to include in that final guidance a protected expenditure level. There is no reason why the Secretary of State should not take into account the amounts of the reserve that are proposed to be spent.
Logically, there would not be much point in making the amendment if the Secretary of State did not intend to take that into account.
Perhaps I missed something in the Under-Secretary of State's explanation, but I heard nothing to suggest any other reason why the Secretary of State should know about any proposals to expend reserves. If the amendment were carried, the Secretary of State would take over from local authorities the right that they have had up to now to decide expenditure affecting their reserves.
There is a further difficulty in this arrangement. Presumably the Secretary of State and the Under-Secretary of State accept that there will be crucial difficulties in attempting to operate this legislation. This is probably the first time in history that there has been an attempt to

change local government expenditure patterns for the financial year by legislation that cannot be on the statute book, even assuming a favourable timetable in the House of Lords, until the beginning of that financial year. It has normally been accepted that local authorities should know well in advance of the start of the financial year what would control their relationships with the Government, the amount of support that they would receive and their legal rights in respect of expenditure.
It has normally been assumed that a local authority should know within 21 days before the start of the financial year what is required of it and the legal obligations necessary to enable it to determine properly its rate precepts and revenue grant.
There is no possibility of that happening now. There is now the maximum prospect of difficulty and confusion as regards the statutory responsibilities and duties of authorities in the run-up period. No one can challenge that at present the authorities still have the duty, 21 days before the start of the financial year, to issue rate precepts calculated according to their revenue grant arrangements. Presumably they are still legally required to do that because they are not entitled to anticipate—certainly one hopes not—that Parliament will pass the Bill in its original form or even in an amended form. As we have seen today, the Bill is still being amended and it may be amended still further. Considerable doubt therefore exists.
The effect of the Government amendments will be to create even greater confusion at the beginning of the financial year. Until the Secretary of State issues his guidance, local authorities will not know their position and they will not be able to make payments to their passenger transport executives. To reduce the great difficulty in operating in the first year, the Government should at the very least withdraw the amendments and reconsider the matter. If they can find no arguments in favour of the amendments given the clear argument that the amendments will merely make the task of the passenger transport authorities more difficult and the prospects for the PTEs no better, the Government should drop the amendments now.
For those reasons, pending the advancement of an argument on the merit of the amendments or some way in which the difficulty can be overcome, I intend to advise my hon. Friends to vote against the amendments when the time comes. I understand, however, that, due to the order in which the amendments occur under the guillotine and the fact that they bite on clause 10, that time will come at a later point in our proceedings.

Mr. Race: It is crucial that the House should understand what the Government are attempting to do in amendment No. 38. We are all indebted to my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) for illustrating so clearly that this is in a way the most disgraceful part of the Bill, because the element of retrospection seeks to pinch the activities of local authorities in 1983–84. It is a bit much for the Under-Secretary of State to propose a further amendment today to destroy local authorities' freedom of action, not in two years' time or a year's time, but in a week's time, before the Bill even becomes law. If Members complain, as we sometimes do, about the attitudes of judges and about retrospective legislation, it is essential that we complain


about the Bill and about this amendment, because the Government are attempting to muddy the waters so that local authorities do not know where they are.
Local authorities are now determining what precepts to set for their lower tier authorities—that is, for the district councils in the case of metropolitan authorities and for the GLC element in the London rates. They will be making those decisions in line with their views about the development of transport policy in the next 12 months. That is perfectly lawful under the present legislation, but at the very time when local authorities are carrying out that process the Government are saying that, despite the legality of the authorities' decisions, they intend to change the law so that on 1 April the authorities will not be able to pay a penny to the transport executives on the basis of those perfectly lawful determinations until the Secretary of State gives them guidance on which to make fresh determinations. That is the politics and legislative practice of wonderland. The House has a duty to vote amendment No. 38 down tonight and, if we have the opportunity, to remove some of the retrospection in clause 10.
The Government are making this change for only one reason. They want the money that local authorities have earmarked for public transport in 1983 in their war chest for the general election. They want the money so that they can hand it to their friends in the middle classes and those who are rather better off than everyone else. They want the money so that they can make tax concessions in the Budget in March. To obtain that freedom the Government are quite happy to limit the freedom of local authorities to act perfectly lawfully under the existing legislation. It is a scandal, and the House should reject this disgraceful amendment.

Mr. Peter Griffiths: I thought that we were examining a series of simple clarifying amendments that those people who have followed the Bill in detail would welcome as meeting some of the criticisms that have been made by Opposition Members. Those Opposition Members are now looking a gift horse in the mouth.
The right hon. Member for Barrow-in-Furness (Mr. Booth) destroyed his own argument extremely well when he said that it had always been the practice that local authorities should be given as much notice as possible about the way in which the rules under which they determine their expenditure might be established. That is exactly what amendments Nos. 38 and 39 do.

Mr. Booth: It is not.

Mr. Griffiths: With respect to the right hon. Gentleman, that is exactly what they do. The Bill establishes a new arrangement whereby expenditure levels will be determined by a process that is initiated locally but which will also take account of the guidance that is issued by the Secretary of State. It is intended that the Bill will become an Act in time to be effective in 1983–84.
It must be reasonable to include in that legislation amendments that make clear all the considerations that local authorities will take into account in future, such as the protection that is granted to them in clause 5. Although we are giving local authorities notice of what is to happen, it will be useful for local authorities to recognise that this year they will have to establish their expenditure pattern only after they have taken due regard of the Secretary of State's guidance.

Mr. Race: rose—

Mr. Griffiths: I shall come to the hon. Gentleman's point later. The proposal is perfectly reasonable. It is not necessary for us to raise the temperature with comments that are reminiscent of the class war, and talk about elections and gifts to party supporters. The Bill will help those people who have to make decisions to make them adequately. It is urgent.
I should have thought that the hon. Member for Wood Green (Mr. Race) would be the first to recognise, if he had had the opportunity to examine this evening's newspaper, that the Esso Petroleum Company Limited is withdrawing its headquarters from London because it can no longer bear the rate burden in central London. If an international company is moving because of its rate burden, we can see the importance of introducing this type of legislation.

Mr. Les Huckfield: It has nothing to do with rates.

Mr. Griffiths: With respect, it has everything to do with the rates. The objective of the Bill and of the amendments is to make clear the limits within which local authorities can reasonably expect to exercise their jurisdiction with regard to support for transport.

Mr. Race: If the level of rates in London is so onerous and dangerous that it is causing a mass exodus of industrial firms, will the hon. Gentleman explain why the dockland enterprise zone in London's East End has been such a lamentable failure, given that local authority rates are not levied there? Secondly, in terms of amendment No. 38, will the hon. Gentleman address himself to the problems for local authorities? Having made a determination about the precept to lower tier authorities, how can they then levy a supplementary precept if they need to change their policy in the light of the Secretary of State's guidance, given that they cannot do it lawfully?

Mr. Griffiths: You would probably not permit me, Mr. Deputy Speaker, to discuss with the hon. Gentleman during this debate the success or otherwise of an enterprise zone. If he is seeking to make the pont that there are many disincentives to establishing businesses in the City of London—transport being one of them—I agree.
We ought not to wait until next year to bring in these provisions, as seemed to be the implication in the speech of the right hon. Member for Barrow-in-Furness. There is an urgency about the matter.
In regard to the second part of the intervention by the hon. Member for Wood Green (Mr. Race), surely it is to avoid the situation that he postulates, that is, the need to carry out the procedure twice, that these amendments are being put forward. It would be utterly wasteful for the authorities to proceed to make financial plans for next year without taking into account the fact that they will be required to follow the new procedure.

Mr. Roger Stott: The Bill is not yet an Act.

Mr. Griffiths: The Bill is before Parliament. We recognise that there must inevitably be a transitional year. The Government's point is that the transitional year must begin on 1 April 1983 because it is necessary to give advanced warning. Opposition Members have said frequently that the courts and others take no notice of guidance given in speeches made by the Secretary of State


or anyone else in the House but only of what the House decides. Whether Opposition Members like it or not, we are attempting to lay down the rules.

Mr. Stott: The hon. Gentleman must be aware that no Government have the God-given right to assume that their proposed legislation will be passed without amendment either by this House or by another place. The Government assume that the Bill will be passed by this House and by another place without significant amendment. That is why they have introduced the amendment at this late stage. It is an amendment in absolute retrospection and they have no right to assume that the Bill will reach the statute book without being amended substantially. If they wanted the provisions to bite in a given year, they could have had them biting in 1984–85 when the legislation had gone through both Houses of Parliament and had got the Royal Assent. They cannot and should not assume that they have the right in retrospection to do it now before the Bill becomes an Act of Parliament.

Mr. Griffiths: I think I have already made the point that it is essential that the legislation should operate from April of this year because of the financial pressures being imposed on ratepayers, domestic and others, by metropolitan counties. The proposals they are putting forward need to be restricted for the benefit of the ratepayers.
There is no attempt to prejudge the issue. If the Bill fails, which it may—Bills have failed before—so will the amendments that my hon. Friend the Under-Secretary has moved. Therefore, as the Bill would not become an Act, the local authorities would not have to take it into account. They have to take account only of what Parliament does, not of what Ministers say. Nevertheless, because we wish to meet the point made by the right hon. Member for Barrow-in-Furness, we believe that local authorities should be told that the provision is to be operative this year and not the succeeding year.

Mr. Les Huckfield: I shall not continue on the point of retrospection, which was serious. The hon. Gentleman referred to the urgency and need for the legislation. Can he understand that Esso Petroleum, to which he has just referred, was simply following a process that is now being pursued by all the major oil companies that are moving their operations out of London, not because of the rate burden but because computers and microprocessors no longer necessitate having large central headquarters in London? Unfortunately, that may happen to many other large firms. That is a problem for London. The hon. Gentleman must have come across the completely contrary evidence when Debenhams in Birmingham closed down its city centre store last year. The reason was the high level of bus fares. Debenhams moved out of Birmingham just because of that. Therefore, in spite of his example of the need for and urgency of the Bill, there are many more examples of the urgency and need to stop the Bill.

Mr. Griffiths: One can choose selective examples. The one that I chose was particularly significant as there was an announcement today. The company had enormous reserves and financial strength. It quoted the level of rates as one of the reasons for its wish to leave the centre of London. That is entirely relevant to the issue that is before us.
I agree that there are pressures in both directions on businesses. However, we are dealing with a specific area of expenditure that places a burden on ratepayers. My hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) drew attention to the enormous projected increase in expenditure by the West Midlands county council. Something had to be done to make it clear that there was a limit to the freedom of local authorities to respond to party political programmes. That is all that we are seeking to do. Therefore, it is essential that we should include the amendments in the Bill, which is excellent. The amendments will improve it further.

Mr. Cowans: Conservative Members have betrayed a remarkable lack of awareness of how local government works. I have heard the argument that the Bill will allow local authorities to reduce their rates this year. That is gobbledegook. The fact is that the metropolitan counties have a statutory duty to get their rate precepts out 21 days before the end of the financial year, on 10 March. The only thing that can be deduced from that fact is that the Secretary of State and his hon. Friends are saying, before the Bill has gone to the other place and regardless of what their Lordships want to discuss there, that these provisions must be enforced by 10 March. If that is not a betrayal of democracy, I do not know what is.
The Conservative manifesto spoke boldly of taking away the chains from local government. If this is "taking away the chains", British Steel will spring up overnight, because what it means is that more chains will be manufactured. If this is a secret plot to bring British Steel into the black, it may very well work.
8.45 pm
In Committee great emphasis was laid on consultation. I think that I am correct in saying this. The Minister and the Secretary of State are here and will leap to their feet to correct me if I am wrong. The hon. Member for Birmingham, Yardley (Mr. Bevan) made great play of the fact that a letter was sent to local authorities. The Secretary of State joined in this and asked them to come in for consultation. As the Member for Yardley rightly said, at that stage they did not respond.
In Committee the Secretary of State said ad nauseam, "I will accept representations from any local authority that wants to come and talk to me." If that is wrong, I hope that he will stand up and correct it now. I shall repeat what I said, because the right hon. Gentleman was obviously busy with that book. It must be a good story. He said that he would accept representations from any local authority that wanted to come and see him.
Let us look at that in the context of the amendment. I propose to concentrate, much to the relief of everyone, on amendment No. 38, because it is nonsense in any terms. Those who understand how local government works—and there seems to be a remarkable lack of understanding on the Government side—know that the amendment will prevent the payment of revenue grants. I think we can all agree on that. One does not have to be a BSc to work it out.
The clause relies on the Bill being out by 10 March, so we had better go to the other place and tell them before they even start to discuss it that the Minister must have the Bill by that date. There seems to be some doubt about that happening, so let us consider what will happen if it does not get through by 10 March and that the clause is carried tonight. It will mean that a local authority which makes


its precept, which it is its statutory duty to do, and issues it on 10 March, will find there are no guidelines—none has been issued because this Bill is not yet law—and it cannot pay from 1 April 1983 a revenue grant to allow any buses to run or any wages to be paid. That is exactly what this says. It is nonsense in anyone's language.
There will be fleets of buses standing idle and men reporting at depots to take those buses out, but the Secretary of State made a mistake. He did not get the Bill by 10 March. The local authority will not be able to pay wages, run buses, or run the Tyne and Wear metro. Everything will stand still. The right hon. Gentleman cannot say, as he has said on previous amendments, that they can borrow, because even if they borrowed they could not pay revenue grants to the PTA. If that is not nonsense, I do not know what is. Everything hinges on the Bill going through.
I am waiting for right hon. and hon. Members on the Government side, who I know have had local government experience, to leap to their feet as business men and tell me how buses are run and wages are paid if the local authority cannot make a revenue grant. In my mind's eye I see thousands of them leaping up to tell us. However, the reality is that not one Conservative Member has stood up. I can assume only that they are as confused as the local authorities will be if the amendment is accepted. Even they have begun to realise that it is gobbledegook.
Let us suppose that, by some mischance, the Secretary of State gets things right and that, as he carries a lot of luck, he gets the Bill enacted on 10 March. Let us also suppose that the metropolitan counties then make their precept. That is very good. I give the Secretary of State 10 out of 10 for trying. It will then be argued that the right hon. Gentleman must issue the guidelines.
Let us imagine that the Bill has been enacted and that it contains amendment No. 38. The mandarins who work round the Secretary of State will draw up the guidelines and he will sign them and send them out. Unless the House has been misled and the guidelines already exist—although no one has told us about it—there will be a lapse of time. However, it is a distinct possibility that they exist already. Perhaps some hon. Member will leap to his feet and tell us that the guidelines have existed since the beginning of our deliberations in Committee.
I am a reasonable fellow, and I assume that that is not the case. Therefore, time will elapse. Time after time the Secretary of State and the Minister have said that they will listen to representations from metropolitan county councils that go to them with special problems about the guidelines. Not all councillors live in London. However, all the councils will have to receive the guidelines and will have to examine them before discovering whether they have a problem.
Let us assume that the authorities find that there is a problem. We must remember that we are talking about the initial year and that there is no plan. Therefore, there is nothing to go on. Not all local authority members dwell in the town hall for 24 hours a day. Therefore, meetings will have to be convened. An authority's legal personnel will have to examine the guidelines to see whether there is a problem.
On the law of averages, there will be many problems. Even if there are only half as many problems as expected, the Minister, being a man of his word, will have to listen to the representations. The local authority, being wise and having taken good legal advice, will go to the Secretary

of State with the problem. However, throughout that period, no revenue grant can be made. Therefore, the buses will still be standing in the depot, and the lads will be saying that although they are not being paid, the Secretary of State will eventually let them know that they can make revenue grants.

Mr. Barry Porter: Rubbish.

Mr. Cowans: The hon. Gentleman has an opportunity to change that rubbish by joining us in the Lobby. He has a great opportunity to take the rubbish out of the Bill. It may seem funny to Conservative Members, but those standing around waiting for wages are actually ratepayers. It is a vicious circle. The Secretary of State will not allow the local authority to pay revenue grant, so the local authority cannot pay its wages and the men cannot pay their rates. That is what we get from business men. No wonder there are so many bankruptcies and closures all over the country. Business is having to put up with such nonsense.
There are extreme difficulties. The Secretary of State fears that local authorities will exercise their democratic right in this first year to implement the policies for which they were elected. Therefore, he uses this method to try to stop that happening. Will he explain how a system can work if no money is put into it?
Let us assume that the Secretary of State is right, and that the Bill is enacted in time. How will a local authority pay a revenue grant? How can the Secretary of State keep his repeated promise that local authorities will have the right to knock on his door? He has said that he will consult them—those are his words, not mine. How can he do that and at the same time keep buses running? If the Secretary of State can explain that, he should not be in the House, he should be emulating Houdini.

Mr. Cryer: I am most grateful to you, Mr. Deputy Speaker, for calling me. As you know, I like to be helpful to occupants of the Chair and if anyone in the House cuts up rough, the Speaker will have my backing. I place you in that category, Mr. Deputy Speaker—it should be "Speaker".
Amendment No. 38 shows a marked contrast to previous Conservative positions. It clearly states that local authorities will not make revenue grants in the year beginning 1 April 1983. The amendment states:
no such determination shall be made by an Authority unless they have been given guidance by the Secretary of State in relation to the determination".
The legislation may be delayed by their Lordships. The Bill will not be delayed here because the Conservatives have a majority and have imposed the guillotine. The debate will finish at 1 am. However, Conservative Members cannot guillotine the Bill in the Lords If the Lords carry on talking, as I hope they will, and then send the Bill back to this place with amendments, time will have to be allocated to deal with the amendments. It is conceivable that the Bill will not receive Royal Assent until after 1 April.
The amendment would make retrospective the prevention of local authorities from making revenue grants, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cowans) has so graphically and capably pointed out. That, in effect, would grind the bus services to a halt or, yet again, force them to borrow in order to pay wage, fuel and other bills.
The proposed legislation is potentially retrospective, quite apart from the fact that local authorities should not be bound by suggested legislation. Parliament has a system of dealing with legislative proposals. They become law on a date to be specified by the Bill, following the Royal Assent. In many ways, we have seen the increasing control of central Government by the use of delegated powers, and by the guidance of those powers with statutory instruments that make codes of practice into legally enforcible documents. Now we have proposed legislation that is being forced on local authorities even though it has no validity. The reason is that the Government know that if this legislative proposal is ignored by local authorities and is subsequently passed by the House, local authorities would be placed in a difficult position in any court case. Individual councillors may find themselves facing difficulties, too, because the district auditor—or the audit commission that is coming into operation which is even more a creature of central Government than the district auditor—may deem that the local authority should have taken notice of a legislative proposal. The authority may be subject to surcharge if, for example, it decides that since the proposal is not legislation, it will go ahead and give a revenue grant. It is a serious matter.

9 pm

Mr. Race: I invite my hon. Friend to consider another aspect that is even more probable. Suppose that a local authority decides that the Bill will become law and that it should pay regard to PEL levels for 1983 as set out in the White Paper, and therefore determines its precept in early March on that basis. Assuming that it wishes to spend more than the PEL levels, it therefore precepts its district authorities for more than it would require if it met the Secretary of State's guidelines. What is to stop an aggrieved district council, perhaps under Conservative control, from taking the metropolitan county council to court and saying "You are spending more than the level of the PEL, even though you have done it quite lawfully and in anticipation of the views of the Secretary of State"?

Mr. Cryer: That shows that the legislative proposal, far from clarifying the law, will confuse it and give rise to a number of uncertainties for those who are elected on election manifestos to carry out their ideas in the service of the public.
Parliament, which has unlimited powers, is imposing legislation on councillors who do not have parity with Members of Parliament because of the fear of surcharge. There are no financial curbs on us if we alter our views. There is no possibility of a surcharge on us. But the financial obligations and the need for financial scrupulousness is far greater for councillors than for hon. Members in this place. We should end that duality of standards and have one standard both for Parliament and local authorities in financial disclosure and one standard for both in the ability to make decisions about expenditure without any threat of surcharge.
My final point concerns the dual standards of the Government. There is unquestionably a potential element of retrospective legislation in the Bill. When the Labour Government were in office in 1975, they introduced the Housing Finance (Special Provisions) Act to provide that

11 local authority councillors should be given back their civic rights. It placed them on the same basis as 400 Scottish National party and Labour councillors who benefited from the Scottish legislation. The crime of those 11 Clay Cross councillors was that they had kept down the rents. They were surcharged by the district auditor. They committed no crime, but they lost their civic rights. The Labour Government introduced legislation to give them parity of status with 400 Scottish councillors.
When the Labour Ministers came to the Dispatch Box, rank after serried rank of Tory Members howled and jeered and said, "It is retrospective legislation. It is the end of civilisation as we know it, the end of democracy and the decline of standards." Indeed, the hon. Member for Liverpool, Toxteth (Mr. Crawshaw)—who was then a Labour Member but now belongs to the SDP—was much heralded because he said that it was a slippery slope to Fascism. There were jeers from the Tory Benches, yet the Tory Government are now casting to one side all idea of consistency and saying that retrospective legislation is entirely suitable when it is convenient for them to attack Labour-controlled local authorities. It is time we remembered that the Tories have no scruples. They are prepared to bring forward any legislation that suits their book—

Mr. Porter: rose—

Mr. Cryer: I shall give way to the hon. Member because he was one of the few Tories in Committee who had the guts to air his criticisms of the legislation. I am sorry to say that, although he spoke extensively about his criticisms to Labour Herald and Labour Weekly, unfortunately, his voice did not follow his vote on many occasions. I think that discretion was probably the better part of valour because he was not present in Committee very much.

Mr. Porter: My voice cannot follow anything very much at the moment. With regard to retrospective legislation, if the Bill does not become an Act by 1 April, I for one will have nothing to do with it. It becomes retrospective only if it becomes an Act after 1 April. At the moment it is not retrospective. The hon. Member for Keighley (Mr. Cryer) knows full well my views on some of the details of the Bill. Certainly the point about retrospection is one that he takes badly.

Mr. Cryer: I have always claimed, and I thought that I made it clear in my comments, that I was referring to potential retrospection. First, the Government cannot control the process of legislation in the Lords and, secondly, their intention is that this clause will apply whatever date the Bill becomes law. Therefore they have a clear intention to bind local authorities not from the date of Royal Assent but from now. That is the important intention being displayed by the Government in the Bill. It is disingenuous for the hon. Member for Bebington and Ellesmere Port to think otherwise, although he said firmly in Committee that he does not like the Bill. My suggestion to him is that if he has any doubts he should go into the Lobby and vote against the amendment. It will take guts and determination for him to do so, but one or two hon. Members on the Opposition Benches have from time to time, when a Labour Government have been in power, experienced the knocks and difficulties that accompany


minority issues. None the less it is a possibility, and since the hon. Gentleman has expressed such reservations, he should follow his voice—

Mr. Arthur Lewis: The hon. Gentleman might get some votes.

Mr. Cryer: That is a possibility. Amendment No. 38 takes away yet again local authority autonomy and its ability to make a judgment about local circumstances. I shall not pursue that matter because we are coming to a series of amendments that deal with that in some detail.
Those Tories who have any concern for their manifesto pledge to return local democracy to local authorities once again should see to it that they vote against amendment No. 38 and others.
In conclusion, Mr. Deputy Speaker, the new method of self-selection for being called to speak is a vast improvement and has my unremitting endorsement.

Mr. Les Huckfield: May I say, Mr. Deputy Speaker, that if it is my signature that you need for your nomination as Speaker, I shall follow the example of my hon. Friend the Member for Keighley (Mr. Cryer)?

Mr. Robert Hughes: Do not ruin his chances altogether.

Mr. Huckfield: I could travel down that road, Mr. Deputy Speaker, but I prefer to talk about cheap fares.
If my hon. Friends the Members for Wood Green (Mr. Race) and Keighley have been strident in their accusations, that stridency has been more than justified. Many of us regard this as potentially one of the most noxious parts of a politically malevolent Bill. One needs to examine more deeply the motives behind the Bill.
When the Secretary of State was looking for a target on which to base his reputation, he examined the Greater London Council and some of the Labour-controlled metropolitan county councils that were seeking to implement cheap fare schemes from 1 April this year. The right hon. Gentleman knew that those schemes would be politically desirable. His advisers therefore conceived a Bill that would enable the Secretary of State, in the quickest possible time, to stop cheap fare schemes coming into operation. The right hon. Gentleman admitted at the Conservative party conference last year that, given legislative time, he would have preferred to have gone further and that he would have liked to take transport decisions completely out of the hands of the metropolitan county councils. However, there was only time to introduce this measly Bill.
The worst suspicions of the Opposition were confirmed when the Secretary of State introduced the Bill and the White Paper on the same day. With the Bill in Standing Committee, the right hon. Gentleman realised that his chances of getting the measure on the statute book in time to stop Labour-controlled metropolitan county councils introducing cheap fares schemes were threatened. The Opposition hoped that this might be one occasion when the other place would prove itself to be of some use by helping to delay the passage of the Bill and so prevent its implementation by 1 April. As proceedings in the Committee became more difficult, with hon. Members unable to understand what the Secretary of State was saying and certainly, on a few occasions, unable to understand what the Under-Secretary of State was saying, we began to wonder increasingly how the Government

would get the measure through the House and through the other place and see it accorded Royal Assent before 1 April.
We can now see how the Government intend that this shall happen. I have to search my memory to recall another example of local authorities being told to base their rate calculations and, what is worse, their rate precept calculations on possible future legislation. The hon. Member for Portsmouth, North (Mr. Griffiths) has stated that local authorities have to take future forecasts into account. They also have to consider population changes, economic circumstances and the rate of inflation. I have never heard previously of local authorities being legally required to take into account legislative changes that might happen in the future.
My hon. Friend the Member for Westhoughton (Mr. Stott) is correct. There could be a massive Back Bench revolt in the other place—it will not be the first time that it has happened—that would stop the passage of the Bill in its present form. One can envisage local authorities up and down the country watching events in the other place, day by day, to see whether the Bill will get through in its present form. If the Secretary of State wants local authorities, Labour-controlled or Conservative-controlled, to make sensible transport decisions and to cut out some of the excesses he alleges still occur, and if he wants transport decisions to be taken in the best possible manner, the process by which he is rail roading the Bill through the House, together with the fact that he intends to make the measure retrospective, is possibly the worst way to seek sensible decisions.
I wish to examine the position of local councillors when they take these decisions. The right hon. Gentleman knows that following the cases of the Camden councillors and of the Kensington councillors, the judgment in the High Court on the balanced fares scheme, the West Midlands county council case and the Merseyside county council case, there is already sufficient legal doubt in the minds of democratically elected Labour councils.
The Minister must understand that by introducing an element of retrospection to a measure which may only get through another place in another form, he is not serving the clarification of the law. He is only underlining the fact that the further we go through the Bill, and the more it goes through the other place, the more complex and doubtful it becomes.
I hope that we shall press the amendment to a Division. The more amendments like this we see the more we realise that the Secretary of State's intentions are political. I hope that, for the sake of good government and accurate, efficient, well-balanced and sensible future transport decisions, this is one amendment that the Secretary of State will see fit to withdraw.

Mr. Eyre: In his thoughtful speech, my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) said that he had no doubt that I would answer the Opposition's questions. I shall now do that, but I know well from the tone of the Opposition speeches that I shall not give pleasing answers to their questions.
The right hon. Member for Barrow-in-Furness (Mr. Booth) was correct when he said that authorities will riot be able to pay grant in 1983–84 until the Secretary of State has given his final guidance. Nevertheless, the intention is that the guidance will be given within a few days of the


Royal Assent. Authorities have, of course, as the right hon. Gentleman knows, been given provisional guidance and have been invited to discuss that guidance.
I want to emphasise the fact, because it is one that the Opposition favour, that the planned use of reserves is to be provided for in the amendment, as requested by Opposition Members. Although section 5 is not brought into effect by clause 10(1)(c) until 1 April 1984—I am replying to one rather technical question put by the right hon. Gentleman—nevertheless, the protection of clause 5(2) is brought into effect for 1983–84 by clause 10(3). I know that there was some debate in Committee about this, but a great deal of thought has been given to it, and I am advised that that is the correct answer to the question.
I cannot give an assurance on the matter raised by the hon. Members for Keighley (Mr. Cryer) and for Wood Green (Mr. Race) and the right hon. Member for Barrow-in-Furness. However, the Secretary of State will take into account the planned use of reserves. The planned use is exempted only from clause 2(1) and 2(2) which lay down the duty to break even or to make good any deficit.
The Bill will give the protection of clause 5(2) to an authority in 1983–84 only if the determination of the grant is within the guidance that will be given after Royal Assent. That will avoid representation, because all necessary proceedings will take place after that time. I know that the hon. Members for Keighley and for Wood Green will be interested in that constitutional point. There will be no need for lengthy processes after Royal Assent, because the Secretary of State will, within a few days, to allow any last-minute representations and to receive formal notification of the use of reserves, give his guidance and authorities will make their determinations.
I am sure that the hon. Members for Newcastle upon Tyne, Central (Mr. Cowans) and for Nuneaton (Mr. Huckfield) will remember that the protected expenditure limits were provisionally published in the White Paper on 5 November, which means that local authorities have been aware of those limits since then. As Opposition Members know, authorities were invited to discuss and to make representations on relevant factors. My right hon. Friend and I are very willing to enter into consultations and to receive representations. Therefore, there has been an adequate basis well in advance for planning the 1983–84 budgets and the precepts that follow.
I confirm that final guidance, after taking account of representations, will be given within a few days of Royal Assent. Therefore, I have answered the questions and set out the programme that will apply as continued progress is made with the Bill.

Amendment agreed to.

Amendment made: No. 5, in page 2, line 25, leave out from '(3)' to 'for' in line 28 and insert
'For the purposes of this section there shall be disregarded any deficit or potential deficit in an accounting period to the extent to which it is or is to be covered by the appropriation of any reserves of the Executive available for the purpose if the appropriation of those reserves'.

Mr. Stott: I beg to move amendment No. 6, in page 2, line 28, leave out 'by the Executive'.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take the following amendments: No. 7, in page 2, line 29, leave out 'by them'.
No. 8, in page 2, line 29, leave out from 'below' to end of line 30.
No. 9, in page 2, line 40, clause 3, after 'of', insert 'an Authority and'.
No. 10, in page 2, line 40, after 'year', insert 'jointly'.
No. 11, in page 2, line 41, leave out
'and submit to the Authority'.
No. 12, in page 3, line 2, leave out first 'them' and insert 'the Executive'.
No. 13, in page 3, line 2, leave out second 'them' and insert 'the Executive'.
No. 14, in page 3, line 20, leave out 'Executive' and insert 'Authority'.
No. 15, in page 3, line 31, after 'plan', insert 'the Authority and'.
No. 17, in page 3, line 40, clause 4, leave out from 'year' to 'in' in line 42.
No. 18, in page 3, line 42, leave out 'as so approved'.
No. 19, in page 4, line 18, leave out 'approve' and insert 'prepare'.
No. 23, in page 4, line 29, leave out
'approving a plan in such a form and'.
No. 26, in page 5, line 29, clause 6, leave out 'submitting any plan or'.
No. 27, in page 5, line 31, leave out 'plan or'.
No. 28, in page 6, line 1, leave out 'an Executive's' and insert 'a'.
No. 29, in page 6, line 1, leave out 'approved' and insert 'adopted'.
No. 30, in page 6, line 4, leave out 'approval' and insert 'adoption'.
No. 31, in page 6, line 5, leave out 'approved' and insert 'adopted'.
No. 32, in page 6, line 9, leave out 'approved' and insert 'adopted'.

Mr. Stott: All the amendments deal with the provisions encompassed in clause 3, which sets out the preparation and submission of the financial plans that the passenger transport authority and the passenger transport executive must submit to the Secretary of State for his final approval.
In Committee, we discussed at great length the rather cumbersome approach recommended by the Government in this Bill in the way in which transport policies and plans are arrived at, and the way in which the executive and the authority must comply with the provisions of clause 3. When we debated the matter in Committee, the Under-Secretary of State, as was his wont, tried to charm us and invited us to believe that the provisions of clause 3 did not affect the relationship that has existed between the passenger transport authorities and the passenger transport executives. I told the Under-Secretary of State and the Secretary of State that at that time we did not believe what was said. We did not believe that the provisions of clause 3 meant that the relationship was unaltered. In fact, clause 3 circumscribes the way in which the passenger transport authority formulates its transport policies and programmes and is a further diminution of the local authority's powers to determine its transport policy. Almost every clause is riddled with provisions that circumscribe the local authority's right to determine its transport policy. Clause 3 brings that more into focus in the way in which the authority has to deal with the executive.
Some Conservative Members may remember the local government re-organisation in 1974 when the metropolitan


authorities were set up and given their powers under a former Act. The relationship that subsequently developed between the passenger transport executive and the passenger transport authority has in many cases been remarkably good. Arguments have been advanced by my colleagues in local authorities that the passenger transport executive ought to come more directly and closely under the control of the passenger transport authority. On the other hand, arguments have been advanced by the employees of the passenger transport executive, the bus drivers and those who have been organised in the Transport and General Workers' Union, by the effect that the situation as it pertains today is preferable.
I recognise that there is a difference between the elected authority and those who work in the transport industry as to the role of the executive. However, my right hon. and hon. Friends and I believe that the relationship between the passenger transport authority and the passenger transport executive is about right. It is about right because the time-honoured practice of consultation and negotiation has produced a transport policy and programme for individual metropolitan authorities in the way in which the elected authority wanted such programmes to be produced.
In Committee I cited evidence from the Monopolies and Mergers Commission report. In the light of recent events, I fully accept that its recommendations are completely disregarded by the Government, but none the less I believe that the Monopolies and Margers Commission is a valuable public body which, given the opportunity, has closely studied the operations of the west midlands passenger transport executive. It is the firm recommendation of the commission—not mine or my right hon. and hon. Friends, not the Association of Metropolitan Authorities or individual local councillors who happen to be chairmen of passenger transport authorities—that:
The Executive feels that it would benefit from less intervention by the county. With the existing statutory background, there is always the possibility of friction between a PTE and its county council. We believe, however, that on the whole the system has worked reasonably well in the West Midlands, thanks to the good sense of key individuals on both sides.
That could be echoed throughout the metropolitan authorities. The relationship which has been arrived at between the authorities and the executive is about right. However, the Secretary of State produces a Bill and presents it to Parliament which fundamentally alters that relationship. The authority will be a guest at the party. It is not its party any longer. The party consists of the Secretary of State and the passanger transport executive, who decide what the plan should be. Eventually, somewhere along this convoluted series of negotiations, the elected authority is advised what the plans should be, and what the plan contains. This is a fundamental departure from what happens now.
We have tabled these amendments to preserve the status quo because in this case the status quo is worth preserving. Why the Secretary of State should want to interfere from Marsham Street in the way that these plans are arrived at, God alone knows. However, he appears to want to do so.
9.30 pm
I was interested to receive from the Chartered Institute of Transport a copy of a letter sent to the Secretary of State giving its opinions about the provisions of the Bill. I draw the Secretary of State's attention to the penultimate paragraph:

Our final point concerns the position of professional transport people, particularly the Members/Directors of the Executives, within the statutory processes envisaged in the Bill. No one can have failed to observe the degree of political conflict—and indeed acrimony—the Bill has generated between the Metropolitan Authorities and the Government. These are the very bodies which, together with the Executives, the Bill engages in complex interlocking procedures of guidance, plan-making and decision about public transport policy and provision. In this context the direct links envisaged in the Bill between the Executives and the Secretary of State in various aspects of these procedures could well bring Executives into conflict with their Authorities. This would not only mutilate against the effectiveness of public transport but would also frustrate the successful operation of the system set out in the Bill and even the provisions of the 1968 and 1969 Acts. We would urge that links between the Department and the Executives should be through, or with the full knowledge of, the Authorities; Clause 6(1), in particular, should be amended on these lines.
This is the professional body, that has written to the Secretary of State advising him of the acrimony that surrounds his legislation—acrimony about which there can be no doubt.
We have had a lobby down here today, although the Secretary of State might not have been aware of the fact, predominantly of people employed in public transport in the Tyne and Wear area, but from elsewhere as well, protesting about the provisions of the Bill. There can be no doubt that there is a great deal of acrimony not only from those who work in public transport but from the elected councillors who have to administer it. The Secretary of State is forcing home his inbuilt advantage of a majority in placing clause 3 before us, and is circumscribing the proper, well-tried, democratic route between the executive and the authority.
I hope that the Secretary of State will have second thoughts. If he does not believe me, perhaps he will believe the Chartered Institute of Transport in its submission to him earlier this week. It said, as we did, that this is the wrong way to go about it. The relationship between the executive and the authority is the right relationship. The Secretary of State should maintain and not destroy that relationship. The provisions of clause 3 do the latter, while our amendments try to maintain the status quo that has worked successfully over many years, and works well even today.

Mr. David Howell: I imagine that hon. Members will wish to pursue some of the points raised by the hon. Member for Westhoughton (Mr. Stott), but perhaps it would for the convenience of the House if I made some initial responses to his remarks.
The hon. Gentleman began by saying that the relationship that had developed between the PTAs and the PTEs was about right, but I am sure that, with his considerable knowledge of the different relationships in different areas, he would be the first to concede that it has developed in different ways. I was interested in the hon. Gentleman's opinion that the relationship was about right, but there has been pressure from the Association of Metropolitan Authorities, which has been campaigning in bizarre ways against the purposes of the Bill. The association said that the authorities wanted to acquire more power, to take over and establish a closer relationship with the passenger transport executives.
I do not know whether the hon. Member for Westhoughton carries his hon. and right hon. Friends with him when he says that he believes that the relationship is right, but I believe that the Association of Metropolitan


Authorities is wrong in the stand that it has taken over the Bill and in rejecting my proposals for consultation from July onwards. Some of its members have been wrong in the propaganda that they have put out, making inaccurate statements about the Bill and at the ratepayers' expense. They are wholly wrong about concessionary fares and they are wrong to want to change the relationship with the passenger transport executives.
The hon. Gentleman said that the Bill changed the relationship between authorities and executives. That matter was pursued at great length through 100 hours of fun in Committee, and there is a difference of view between us. The Government contend that although the financial and other duties of the executive are modified in the Bill in relation to the 1968 and 1969 Acts, the basic relationship between the two bodies has not significantly altered.
If the hon. Gentleman wishes to challenge that, he must do more than assert that there has been a fundamental change. He must go back to the 1968 and 1969 Acts and identify exactly where any change in relationships has occurred.
There have been some additions. The Bill requires that the executives shall be responsible for the initial preparation of a three-year plan. I think that it was the hon. Gentleman, or one of his hon. Friends in Committee, who said that that was already the practice in some areas so there was no need to put it into legislation. We argue the other way. The legislation underpins that good practice in some areas and brings the benefits of sensible, stable, long-term planning for transport support and subsidies to more metropolitan areas than at present.
Under the existing legislation, the authorities have the power to appoint members of the PTE. That will remain. The power of the authorities to make grants to the PTEs also remains, as does the power to obtain information, to appoint auditors, to give directions on the form of accounts, the establishment of reserves and the provision of particular services.
The initiatives on matters such as the preparation of budgets, plans for service reorganisation and for capital expenditure are extremely important. They are undermined if money is flowing out in revenue support in every direction. Agreements with British Rail, the National Bus Company and other bus companies and the initiatives on fare levels rest with the executives, although they have to secure the approval of the authority for what they propose. That continues to be enshrined in this legislation.
The hon. Gentleman is in the same position as I in that, unlike some of the veterans of the past transport legislation, I did not take part in the debates on the 1968 and 1969 legislation. It is clear from the reports of those debates and from the legislation that emerged, however, that the intention was perfectly sensible. The executive carries out the executive function, including the preparation of plans and the carrying out of those plans to carry on the transport business.
The authorities should fulfil their political role of calling for alternatives, for which there is provision in this legislation, and making decisions on the social subsidy, the revenue grant, the additional money from ratepayers and taxpayers which will be put in in response to certain political judgments and local judgments about matters over and above those taken into account by the executives.
That was the pattern under the previous legislation. The only change is not in the relationship between the authority and the executive but in the process, so that the Secretary of State is involved with both bodies. The Secretary of State gives guidance to the executive, which formulates the plans, as under the 1968 and 1969 Acts, and then notifies the Secretary of State of those plans. Under clause 6, the plans are also supplied to the authorities, so everyone knows what everyone else is doing.
The hon. Gentleman feels strongly about the relationship, as should anyone who believes that it has been about right. No one wishes to see great changes in something that is about right. All that is proposed over and above that, however, is a planning process throughout the year, beginning with guidance from the Secretary of State on the level of expenditure which the Government believe, in the light of certain criteria set out in the Bill, including national resources, should be protected from any legal challenge. If authorities decide to spend above that level, there will be no protection from legal challenge.
That is the basic purpose and thrust of the Bill and it is reflected in these arrangements. There is no upheaval in the relationship between the PTEs and the PTAs. The hon. Gentleman is wasting his energy and his oratory in seeking to identify some great upheaval resulting from the Bill, because there is none. Like the hon. Gentleman, I believe that the relationship is about right. I also believe that the pattern involving initial guidance from the Secretary of State can bring nothing but advantage in creating a more stable basis on which local authorities' plans can be formulated in future years so that stability and efficiency can be built into our transport system both in the capital and in the metropolitan counties.
I hope that my hon. Friends, and, indeed, all those who want a stable and efficient transport system, will support our intention and reject amendments that seek to change it.

Mr. Stott: The Secretary of State should realise that this is a very important issue. If more Opposition Members have not sought to contribute to the debate, it is because we are very constrained by time and the House needs to discuss other important amendments.
The Secretary of State has given his point of view, as he is perfectly entitled to do. He has challenged me to explain why I and my hon. Friends believe that there is a definite and distinct divergence between the provisions of the 1969 Act and those of the Bill. I thought that I had done that in my earlier remarks, but clearly the Secretary of State has closed his mind to any argument in respect of the relationship between the PTEs and the PTAs. He, his hon. Friend the Under-Secretary of State and one or two Conservative backwoodsmen are the only people who actually believe what he says. I have met no one in the AMA, the local authorities or anywhere else who believes that the Bill and the provisions of clause 3 do not fundamentally alter the relationship between the executives and the authorities.
If the Secretary of State continues blithely to state that nothing has changed, only he will believe his own rhetoric. No one else will. If the right hon. Gentleman is not prepared now to take on board some sensible, reasonable and rational amendments, I must ask my hon. Friends and any other hon. Member who is listening to reject the Government's proposals and to vote for ours.

Amendment negatived.

Amendment proposed: No. 9, in page 2, line 40, after 'of', insert 'an Authority and'.—[Mr. Stott.]

Question put, That the amendment be made:—

The House divided: Ayes 235, Noes 284.

Division No. 56]
[9.45 pm


AYES


Abse, Leo
Forrester, John


Adams, Allen
Foster, Derek


Allaun, Frank
Fraser, J. (Lamb'th, N'w'd)


Anderson, Donald
Freeson, Rt Hon Reginald


Archer, Rt Hon Peter
Freud, Clement


Ashley, Rt Hon Jack
Garrett, John (Norwich S)


Ashton, Joe
Garrett, W. E. (Wallsend)


Atkinson, N. (H'gey,)
George, Bruce


Bagier, Gordon AT.
Ginsburg, David


Barnett, Guy (Greenwich)
Golding, John


Barnett, Rt Hon Joel (H'wd)
Gourlay, Harry


Beith, A. J.
Graham, Ted


Bennett, Andrew (St'kp't N)
Grant, John (Islington C)


Bidwell, Sydney
Hamilton, James (Bothwell)


Booth, Rt Hon Albert
Hamilton, W. W. (C'tral Fife)


Boothroyd, Miss Betty
Hardy, Peter


Bottomley, Rt Hon A. (M'b'ro)
Herman, Harriet (Peckham)


Bradley, Tom
Harrison, Rt Hon Walter


Bray, Dr Jeremy
Hart, Rt Hon Dame Judith


Brocklebank-Fowler, C.
Haynes, Frank


Brown, Hugh D. (Provan)
Heffer, Eric S.


Brown, R. C. (N'castle W)
Hogg, N. (E Dunb't'nshire)


Brown, Ronald W. (H'ckn'y S)
Holland, S. (L'b'th, Vauxh'll)


Brown, Ron (E'burgh, Leith)
Home Robertson, John


Buchan, Norman
Homewood, William


Callaghan, Rt Hon J.
Horam, John


Callaghan, Jim (Midd't'n &amp; P)
Howell, Rt Hon D.


Campbell, Ian
Hoyle, Douglas


Campbell-Savours, Dale
Huckfield, Les


Cant, R. B.
Hughes, Mark (Durham)


Carmichael, Neil
Hughes, Robert (Aberdeen N)


Cartwright, John
Jay, Rt Hon Douglas


Clark, Dr David (S Shields)
John, Brynmor


Clarke, Thomas (C'b'dge, A'rie)
Johnson, James (Hull West)


Cocks, Rt Hon M. (B'stol S)
Johnson, Walter (Derby S)


Cohen, Stanley
Jones, Rt Hon Alec (Rh'dda)


Coleman, Donald
Jones, Barry (East Flint)


Conlan, Bernard
Jones, Dan (Burnley)


Cox, T. (W'dsw'th, Toof'g)
Kaufman, Rt Hon Gerald


Crawshaw, Richard
Kerr, Russell


Crowther, Stan
Kilroy-Silk, Robert


Cryer, Bob
Lambie, David


Cunliffe, Lawrence
Lamond, James


Cunningham, G. (Islington S)
Leadbitter, Ted


Cunningham, Dr J. (W'h'n)
Leighton, Ronald


Dalyell, Tam
Lewis, Arthur (N'ham NW)


Davidson, Arthur
Lewis, Ron (Carlisle)


Davis, Clinton (Hackney C)
Litherland, Robert


Davis, Terry (B'ham, Stechf'd)
Lofthouse, Geoffrey


Deakins, Eric
Lyon, Alexander (York)


Dean, Joseph (Leeds West)
Lyons, Edward (Bradf'd W)


Dewar, Donald
Mabon, Rt Hon Dr J. Dickson


Dixon, Donald
McCartney, Hugh


Dobson, Frank
McDonald, Dr Oonagh


Dormand, Jack
McElhone, Mrs Helen


Dubs, Alfred
McGuire, Michael (Ince)


Duffy, A. E. P.
McKelvey, William


Dunnett, Jack
MacKenzie, Rt Hon Gregor


Dunwoody, Hon Mrs G.
Maclennan, Robert


Eadie, Alex
McMahon, Andrew


Eastham, Ken
McNally, Thomas


Edwards, R. (W'hampt'n S E)
McTaggart, Robert


Ellis, R. (NE D'bysh're)
McWilliam, John


Ellis, Tom (Wrexham)
Marks, Kenneth


English, Michael
Marshall, D (G'gow S'ton)


Ennals, Rt Hon David
Marshall, Dr Edmund (Goole)


Evans, John (Newton)
Marshall, Jim (Leicester S)


Ewing, Harry
Mason, Rt Hon Roy


Faulds, Andrew
Maxton, John


Field, Frank
Maynard, Miss Joan


Fitch, Alan
Meacher, Michael


Flannery, Martin
Mikardo, Ian





Millan, Rt Hon Bruce
Snape, Peter


Miller, Dr M. S. (E Kilbride)
Spellar, John Francis (B'ham)


Morris, Rt Hon A. (W'shawe)
Spriggs, Leslie


Morris, Rt Hon C. (O'shaw)
Stallard, A. W.


Morris, Rt Hon J. (Aberavon)
Steel, Rt Hon David


Morton, George
Stewart, Rt Hon D. (W Isles)


Moyle, Rt Hon Roland
Stoddart, David


Mulley, Rt Hon Frederick
Stott, Roger


Newens, Stanley
Strang, Gavin


Oakes, Rt Hon Gordon
Straw, Jack


Ogden, Eric
Summerskill, Hon Dr Shirley


O'Halloran, Michael
Taylor, Mrs Ann (Bolton W)


O'Neill, Martin
Thomas, Dafydd (Merioneth)


Orme, Rt Hon Stanley
Thomas, Jeffrey (Abertillery)


Owen, Rt Hon Dr David
Thomas, Mike (Newcastle E)


Palmer, Arthur
Thomas, Dr. (Carmarthen)


Park, George
Thorne, Stan (Preston South)


Parker, John
Tinn, James


Parry, Robert
Torney, Tom


Penhaligon, David
Varley, Rt Hon Eric G.


Powell, Raymond (Ogmore)
Wainwright, E. (Dearne V)


Race, Reg
Wainwright, R. (Colne V)


Radice, Giles
Walker, Rt Hon H. (D'caster)


Rees, Rt Hon M (Leeds S)
Wardell, Gareth


Richardson, Jo
Weetch, Ken


Roberts, Albert (Normanton)
Wellbeloved, James


Roberts, Allan (Bootle)
Welsh, Michael


Roberts, Ernest (Hackney N)
White, J. (G'gow Pollok)


Roberts, Gwilym (Cannock)
Whitehead, Phillip


Robertson, George
Whitlock, William


Robinson, G. (Coventry NW)
Wigley, Dafydd


Rooker, J. W.
Willey, Rt Hon Frederick


Roper, John
Williams, Rt Hon A. (S'sea W)


Ross, Ernest (Dundee West)
Williams, Rt Hon Mrs (Crosby)


Ross, Stephen (Isle of Wight)
Wilson, Gordon (Dundee E)


Rowlands, Ted
Wilson, Rt Hon Sir H. (H'ton)


Ryman, John
Wilson, William (C'try SE)


Sever, John
Winnick, David


Sheerman, Barry
Woodall, Alec


Sheldon, Rt Hon R.
Woolmer, Kenneth


Shore, Rt Hon Peter
Wrigglesworth, Ian


Short, Mrs Renée
Wright, Sheila


Silkin, Rt Hon J. (Deptford)
Young, David (Bolton E)


Silkin, Rt Hon S. C. (Dulwich)



Silverman, Julius
Tellers for the Ayes:


Skinner, Dennis
Mr. Harry Cowans and


Smith, Cyril (Rochdale)
Mr. Allen McKay.


Smith, Rt Hon J. (N Lanark)



NOES


Aitken, Jonathan
Brotherton, Michael


Alexander, Richard
Browne, John (Winchester)


Alison, Rt Hon Michael
Bruce-Gardyne, John


Amery, Rt Hon Julian
Bryan, Sir Paul


Ancram, Michael
Buchanan-Smith, Rt. Hon. A.


Arnold, Tom
Budgen, Nick


Aspinwall, Jack
Bulmer, Esmond


Atkins, Robert (Preston N)
Butcher, John


Atkinson, David (B'm'th,E)
Butler, Hon Adam


Baker, Kenneth (St. M'bone)
Carlisle, Kenneth (Lincoln)


Baker, Nicholas (N Dorset)
Carlisle, Rt Hon M. (R'c'n)


Beaumont-Dark, Anthony
Channon, Rt. Hon. Paul


Bendall, Vivian
Chapman, Sydney


Benyon, Thomas (A'don)
Churchill, W. S.


Benyon, W. (Buckingham)
Clark, Hon A. (Plym'th, S'n)


Berry, Hon Anthony
Clark, Sir W. (Croydon S)


Best, Keith
Clegg, Sir Walter


Bevan, David Gilroy
Cockeram, Eric


Biggs-Davison, Sir John
Colvin, Michael


Blackburn, John
Cope, John


Blaker, Peter
Corrie, John


Body, Richard
Costain, Sir Albert


Bonsor, Sir Nicholas
Cranborne, Viscount


Bottomley, Peter (W'wich W)
Critchley, Julian


Bowden, Andrew
Crouch, David


Braine, Sir Bernard
Dickens, Geoffrey


Bright, Graham
Dorrell, Stephen


Brinton, Tim
Douglas-Hamilton, Lord J.


Brittan, Rt. Hon. Leon
Dover, Denshore


Brooke, Hon Peter
Dunn, Robert (Dartford)






Durant, Tony
Latham, Michael


Eden, Rt Hon Sir John
Lawrence, Ivan


Edwards, Rt Hon N. (P'broke)
Lee, John


Eggar, Tim
Le Merchant, Spencer


Elliott, Sir William
Lennox-Boyd, Hon Mark


Emery, Sir Peter
Lewis, Sir Kenneth (Rutland)


Eyre, Reginald
Lloyd, Ian (Havant &amp; W'loo)


Fairbairn, Nicholas
Lloyd, Peter (Fareham)


Fairgrieve, Sir Russell
Loveridge, John


Faith, Mrs Sheila
Luce, Richard


Farr, John
Lyell, Nicholas


Fell, Sir Anthony
McCrindle, Robert


Fenner, Mrs Peggy
Macfarlane, Neil


Finsberg, Geoffrey
MacGregor, John


Fisher, Sir Nigel
MacKay, John (Argyll)


Fletcher, A. (Ed'nb'gh N)
Macmillan, Rt Hon M.


Forman, Nigel
McNair-Wilson, M. (N'bury)


Fowler, Rt Hon Norman
McNair-Wilson, P. (New F'st)


Fox, Marcus
McQuarrie, Albert


Fraser, Peter (South Angus)
Madel, David


Fry, Peter
Major, John


Gardiner, George (Reigate)
Marland, Paul


Gardner, Sir Edward
Marlow, Antony


Garel-Jones, Tristan
Marshall, Michael (Arundel)


Gilmour, Rt Hon Sir Ian
Marten, Rt Hon Neil


Goodhart, Sir Philip
Mates, Michael


Goodhew, Sir Victor
Maude, Rt Hon Sir Angus


Goodlad, Alastair
Mawby, Ray


Gorst, John
Mawhinney, Dr Brian


Gow, Ian
Maxwell-Hyslop, Robin


Gower, Sir Raymond
Mayhew, Patrick


Grant, Sir Anthony
Meyer, Sir Anthony


Gray, Rt Hon Hamish
Miller, Hal (B'grove)


Greenway, Harry
Mills, Iain (Meriden)


Grieve, Percy
Mills, Sir Peter (West Devon)


Griffiths, Peter (Portsm'th N)
Miscampbell, Norman


Grist, Ian
Mitchell, David (Basingstoke)


Grylls, Michael
Moate, Roger


Gummer, John Selwyn
Monro, Sir Hector


Hamilton, Hon A.
Montgomery, Fergus


Hampson, Dr Keith
Moore, John


Hannam, John
Morgan, Geraint


Haselhurst, Alan
Morris, M. (N'hampton S)


Hastings, Stephen
Morrison, Hon C. (Devizes)


Havers, Rt Hon Sir Michael
Murphy, Christopher


Hawkins, Sir Paul
Myles, David


Hawksley, Warren
Neale, Gerrard


Hayhoe, Barney
Needham, Richard


Heath, Rt Hon Edward
Neubert, Michael


Heddle, John
Newton, Tony


Henderson, Barry
Normanton, Tom


Heseltine, Rt Hon Michael
Nott, Rt Hon Sir John


Hicks, Robert
Onslow, Cranley


Higgins, Rt Hon Terence L.
Osborn, John


Hill, James
Page, John (Harrow, West)


Hogg, Hon Douglas (Gr'th'm)
Page, Richard (SW Herts)


Holland, Philip (Carlton)
Parkinson, Rt Hon Cecil


Hooson, Tom
Parris, Matthew


Hordern, Peter
Patten, Christopher (Bath)


Howe, Rt Hon Sir Geoffrey
Pawsey, James


Howell, Rt Hon D. (G'ldf'd)
Percival, Sir Ian


Howell, Ralph (N Norfolk)
Peyton, Rt Hon John


Hunt, David (Wirral)
Pollock, Alexander


Hunt, John (Ravensbourne)
Porter, Barry


Hurd, Rt Hon Douglas
Prentice, Rt Hon Reg


Irvine, Rt Hon Bryant Godman
Price, Sir David (Eastleigh)


Irving, Charles (Cheltenham)
Prior, Rt Hon James


Jessel, Toby
Proctor, K. Harvey


Johnson Smith, Sir Geoffrey
Rathbone, Tim


Jopling, Rt Hon Michael
Rees, Peter (Dover and Deal)


Kaberry, Sir Donald
Rees-Davies, W. R.


Kellett-Bowman, Mrs Elaine
Renton, Tim


Kimball, Sir Marcus
Rhodes James, Robert


King, Rt Hon Tom
Rhys Williams, Sir Brandon


Kitson, Sir Timothy
Ridley, Hon Nicholas


Knight, Mrs Jill
Rippon, Rt Hon Geoffrey


Knox, David
Roberts, M. (Cardiff NW)


Lamont, Norman
Roberts, Wyn (Conway)


Lang, Ian
Rossi, Hugh


Langford-Holt, Sir John
Rost, Peter





Rumbold, Mrs A. C. R.
Thompson, Donald


Sainsbury, Hon Timothy
Thornton, Malcolm


St. John-Stevas, Rt Hon N.
Townend, John (Bridlington)


Shaw, Giles (Pudsey)
Trippier, David


Shaw, Sir Michael (Scarb')
Trotter, Neville


Shelton, William (Streatham)
van Straubenzee, Sir W.


Shepherd, Colin (Hereford)
Vaughan, Dr Gerard


Shepherd, Richard
Viggers, Peter


Shersby, Michael
Waddington, David


Silvester, Fred
Wakeham, John


Skeet, T. H. H.
Waldegrave, Hon William


Smith, Dudley
Walker, B. (Perth)


Smith, Tim (Beaconsfield)
Walker-Smith, Rt Hon Sir D.


Speed, Keith
Wall, Sir Patrick


Speller, Tony
Waller, Gary


Spence, John
Walters, Dennis


Spicer, Jim (West Dorset)
Warren, Kenneth


Spicer, Michael (S Worcs)
Watson, John


Sproat, Iain
Wells, Bowen


Squire, Robin
Wells, John (Maidstone)


Stainton, Keith
Wheeler, John


Stanbrook, Ivor
Whitney, Raymond


Stanley, John
Wickenden, Keith


Steen, Anthony
Wiggin, Jerry


Stevens, Martin
Wilkinson, John


Stewart, A. (E Renfrewshire)
Williams, D. (Montgomery)


Stewart, Ian (Hitchin)
Winterton, Nicholas


Stokes, John
Wolfson, Mark


Stradling Thomas, J.
Young, Sir George (Acton)


Tapsell, Peter
Younger, Rt Hon George


Tebbit, Rt Hon Norman



Temple-Morris, Peter
Tellers for the Noes:


Thatcher, Rt Hon Mrs M.
Mr. Carol Mather and


Thomas, Rt Hon Peter
Mr. Robert Boscawen.

Question accordingly negatived.

Clause 4

APPROVAL OF FINANCIAL PLANS AND DETERMINATION OF REVENUE GRANTS

Amendment proposed: No. 20, in page 4, line 20, leave out 'particular'.—[Mr. Robert Hughes.]

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take amendment No. 22, in page 4, line 28, at end insert—
'(d) the general, social and economic circumstances of the area, including the number of people unemployed, the average level of earnings and the level of car owner-ship;
(e) any approved structure plan or local plan or any other relevant town and country planning considerations affecting the area for which the authority is responsible;
(f) all other matters referred to in section 9(3) of the 1968 Act.'.
10 pm

Mr. Crowther: I should like to comment briefly on amendment No. 20 and then turn to amendment No. 22.
Amendment No. 20 would leave out "particular" from a part of the Bill which will require the passenger transport authority to have "particular regard" to certain matters. There are three matters to which it would have to have particular regard. Unfortunately, this appears to be in conflict with section 9(3) of the Transport Act 1968, under which authorities will continue to operate, and which has not been repealed. Section 9(3) requires authorities to have "due" regard to certain matters when they are deciding on plans on the basis of which they must provide a properly integrated and efficient system of public transport. What


"due" means in that connection I am not sure. It would mean the same if "due" were not there: they would have to have regard.
I tried in Committee to persuade both the Secretary of State and the Under-Secretary to explain the difference between "regard" and "particular regard". I did not succeed in obtaining a clear answer, but there must be some difference and it is with the purpose of eliminating the difference that this amendment is proposed.
It would then mean that equal weight would have to be attached to the matters referred to in the new Bill and to the matters referred to in the 1968 Act. It would clarify the point completely and make life a great deal easier for the members of authorities who have to make these decisions.
Amendment 22 is aimed at the same objective but goes via a different route. We suggest that the problem be solved by adding to the list of matters to which the authority must have either "regard", if amended, or "particular regard", if the Bill is not amended, to a number of very important considerations, including those which are already set out in the 1968 Act. Our purpose in all this is that there should be no dubiety in the minds of members of authorities as to how they are required to carry out their duties.
As things stand, with the 1968 Act still in force and this new Bill saying something quite different, members of authorities will be placed in a position of considerable difficulty in deciding what their duties are going to be. This seems to be a very simple way of clearing the matter up. The Government ought to welcome this because we are helping to clarify what will be a very unclear piece of legislation if the Bill remains unamended.
There are various matters which we think ought properly to be considered by an authority in deciding its policy in relation to public passenger transport, fares and subsidies. It should consider
the general, social and economic circumstances of the area, including the number of people unemployed, the average level of earnings and the level of car ownership.
We also say that it should take into consideration
any approved structure plan or local plan or any other relevant town and country planning considerations affecting the area for which the authority is responsible.
Finally, we throw in for good measure
all other matters referred to in section 9(3) of the 1968 Act.
That would make the whole thing a neat package of matters to which the authority would have to have regard, including, of course, the Secretary of State's guidance. However, the Secretary of State's guidance should not overrule all these other matters, which are of vital importance. Indeed, if the Secretary of State is going to oppose this amendment—as I imagine he will do—I hope that he will explain why he thinks these are not matters to which an authority should have regard in the preparation of its transport policy, as any transport authority which did not have regard to matters like the level of motor car ownership, the level of earnings, the level of unemployment and so forth could not possibly do its job properly.
If the Secretary of State had ever been involved in such work, he would know that an authority cannot do its job properly if it ignores such things. The needs of various areas differ. Under the 1968 Act, the authority must pay attention to an area's needs. It must have due regard to that. The Secretary of State is proposing to add a maximum of 10 people to his staff to assist him in implementing this complicated new legislation. It must be

obvious to everyone that it will not be within the Secretary of State's scope or ability to carry out investigations to establish the needs of each area. Therefore, the authority must have regard to that. It should be made responsible.
As I have said, needs vary from area to area. I shall not give all the examples that I could give, but in South Yorkshire family incomes are significantly below the national average. Indeed, they are about £20 below the national average. The level of car ownership in South Yorkshire is far below the national average. Unfortunately, unemployment is much higher than the national average. Those are examples of the things that the authority alone can deal with.
I have in my hand an interesting document, and the Secretary of State should pay it some attention. It raises an important constitutional or legal problem. In Committee, the Secretary of State repeatedly refused requests from us to invite a Law Officer of the Crown to one of our sittings so that we could ask him about he legal problems that we envisaged as a result of the Bill One of those problems is that, under the Local Government Act 1972, South Yorkshire county council—like all county councils—was made responsible for producing a Structure plan in accordance with the Town and Country Planning Act 1971. The plan was produced and duly approved by the Secretary of State for the Environment on 19 December 1979. So far so good. The point is that the cheap fares policy was an integral feature of that structure plan, which was approved by the Secretary of State for the Environment. An officer of the council gave me the document to which I have referred; and I am grateful to him. It shows many points at which the cheap fares policy is integral to the structure plan. Without that policy, the structure plan could not be implemented.
Unfortunately, the Secretary of State for Transport is now adopting a different view from his right hon. Friend the Secretary of State for the Environment. He is producing legislation that will make it impossible for county councils to operate the policy that is part of the approved structure plan. I stress that an approved structure plan is a statutory document. It is the statutory duty of the structure plan authority to ensure that it is implemented and that all planning decisions throughout the county are made within the framework of that approved structure plan.
The Secretary of State has refused to allow Law Officers of the Crown to tell us their view, so I want to know his view of the law when the Bill has been enacted. If South Yorkshire county council—in pursuit of its duty as a structure plan authority to ensure that the provisions of the plan are observed—finds it necessary to pay a revenue grant to the executive that is higher than the Secretary of State's guidance figure and thus outside his protected expenditure level, will it face the danger of legal action; and will it risk the possibility of surcharge? Will the council be protected because it is carrying out their duties under another Act? We are entitled to know. Certainly, members of county councils will wish to know. If they are protected, it makes nonsense of the whole concept of the protected expenditure level. There would be no need for it, because the law would remain as it is.
An authority that is behaving responsibly and exercising its discretion properly is not acting unlawfully. That was the decision of Lord Justice Woolf in the Merseyside case. Presumably, as the Government have written the provision into the Bill, local authorities are not


protected. The courts will find themselves in the farcical position of having to decide whether an authority had acted lawfully, while knowing that it had acted lawfully under the 1968 and 1971 Acts. Will it have acted unlawfully under the 1983 Act? The court will have to decide on the conflict of views between one Secretary of State and another. The authority will be a football between them. It will be carrying out its duties under a plan approved by the Secretary of State for the Environment but will be falling foul of the Secretary of State for Transport. It is a serious matter. We need a clear sign of what the Government consider the law will be at the end of the process. It is a farcical position.
My right hon. and hon. Friends have said that the proper people to make decisions are locally elected councillors. We will be faced with statistics on such matters as car ownership, levels of income and so on. Only the locally elected councillors can work out the implications in human terms of those statistics. They know how families are affected by low incomes, by having no motor car or by being unemployed. I am sure that the Secretary of State does not have the faintest idea of how families are affected by such problems. They can be properly solved only at local level.
It is more than ever necessary that we should amend the clause to maintain the position that has always operated, where sensible and responsible local authorities make their own decisions. If the public do not like the decisions, they will throw out the councillors at the next election.

Mr. Stott: I do not know whether my hon. Friend has received a copy of an interesting letter from the Chartered Institute of Transport to the Secretary of State. I wish to quote it to reinforce his point about the differences between what the Secretary of State is doing in the transport area and what the Secretary of State for the Environment is doing with the structure plans. The institute states:
Regrettably the dichotomy between the guidance figure and the expenditure targets set by the Secretary of State for the Environment significantly weakens the value of your guidance. We appreciate the difficulty of harmonising these two policies with different objectives and, of course, a great deal depends on what the Metropolitan Authorities decide to spend on other services within the budget. But it already seems that for certain authorities block grant penalties may well apply before expenditure on subsidy reaches your guidance figure.
That view buttresses the point that my hon. Friend is making so well this evening.

Mr. Crowther: I am grateful to my hon. Friend for that intervention. I have not seen that letter, but it reinforces my point. It further illustrates the nonsense of the position that will be created by this foolish Bill.
10.15 pm
I would have liked the opportunity to draw some illustrations from the document to which I referred, but time is too short. I will mention only one which demonstrates my point clearly. It refers to industrial development but the same principle applies to shopping policy, to recreational policy and so on. This is an extract taken from the approved structure plan. It states:
A factor influencing the capital investment proposals for transport, car parking provision and the balance between these matters and various land uses, particularly in central areas, has been the current County Council's policy of containing fares and the assumption that future County Councils would continue the

same policy. It is the County Council's view that fares containment helps people to make more and longer journeys and thereby increases the range of job opportunities for workers and widens the labour catchment area for employers.
That is an extremely important point. That, I repeat, is part of a structure plan approved by the Secretary of State for the Environment. It is a stautory document from which the county council is not entitled to stray.
I shall not detain the House for more than another minute. The point has been fairly clearly made. We believe that it is necessary for members of local authorities—not only south Yorkshire to which I have referred but authorities all over the country—to understand just what their duties are and what protection they will have in carrying out their duties in a normal, reasonable and lawful manner.
The amendments under discussion will clarify the position. They will make it clear that a transport authority, although it has a duty under the new legislation to take notice of the guidance of the Secretary of State, also has other duties. The other duties are of no less importance and of no less weight than having regard to what the Secretary of State has said. Although the Bill is still a bad Bill and the principle of interference with local Government is still there, and we do not like it, if the amendments were written into the Bill, it would be more understandable and would clarify what is at the moment a murky area.

Mr. John Page: I wish, as a London Member, to express on behalf of my constituents total abhorrence of amendment No. 20. Of all the rather stupid, bent wire hangers on which the Opposition have tried to hang a debate tonight, amendment No. 20 appears to me to be the most bent and the most likely to fall off the peg. It is clear that the amendment seeks to delete from the Bill the requirement that particular interest should be paid by the authority to the need to achieve a proper balance between the interests of ratepayers in their area and the interests of transport users.
Over the past 18 months London has suffered from the fact that particular regard was not paid to those interests. My constituents and the people of London, as I said in an earlier debate, still have tattooed on their hearts what the GLC jokingly called the "Fares Fair" policy. I beg my right hon. Friend to oppose the amendment and to keep in the Bill the requirement that particular attention should be paid to clause 3(4). At the time of the "Fares Fair" policy, insufficient regard was paid to the interests of ratepayers in my constituency. Over 3,000 people petitioned me to take a stand on the issue.
I congratulate my right hon. Friend on the Bill. I beg him to oppose the obnoxious amendment No. 20.

Mr. Marks: The amendment proposes that the Secretary of State as well as the local authorities should take cognisance of the three items in the Bill and the three in the amendment. I have tried to discover from Ministers in Committee what is meant by "guidance". Will the Secretary of State simply give a figure to the authority when it submits a plan, or will there be a statement? On the occasions when the Secretary of State gives guidance he should make a statement to the authority giving the reasons. The statement should be public. Let us have open government. Let the right hon. Gentleman tell the local authority and the executive the reasons for not agreeing with them. So far, all that has been provided is a figure.
Greater Manchester asked for £49 million, and the Secretary of State responded with £44 million. It is


obvious that the right hon. Gentleman regards Greater Manchester as a responsible authority. I agree that it is. However, the right hon. Gentleman does not say how the figure in the White Paper was reached. Does he intend to give no reasons for the decision that he reaches?
The Department of Transport, when it builds motorways, a bypass or a new trunk road, has a system called a cost-benefit analysis in which it endeavours to quantify the benefits against expenditure. Sometimes, expenditure on building a motorway is not a matter of pouring money down the drain. There can be benefits. The Department considers the probable reduction in the number of accidents, the saving of time for commercial and private vehicles and the environmental benefit to the town or village that will be bypassed. It is all very scientific.
What calculations will be made by the Secretary of State or the five to 10 additional members of his staff who carry out the work? Will there be any analysis? The Opposition argue that there should be an examination not only by the authority but also by the Secretary of State, if he is to interfere to this extent, giving reasons for what he does. Greater Manchester has started to operate a cost-benefit analysis system. The Department has shown interest in its progress. It is significant, however, that the Department has not undertaken a similar exercise.
What will happen is that the Secretary of State will think of a number. My guess is that, in the case of Manchester, he has deducted an amount that might arise from lower interest rates and a reduction in national insurance charge, to arrive at his figure. What system is he using? The right hon. Gentleman talks about planning. Is he saying that he will not take into account and will not expect the authority to take into account the three items listed in amendment No. 22? If he does not take them into account, the whole Bill is a mockery. To give a figure without supplying the reasons is nonsense, and I am sure that even the hon. Member for Harrow, West (Mr. Page), who has arrived late on the scene, will not accept it.

Mr. Ronald W. Brown: I support the general theme of the hon. Member for Manchester, Gorton (Mr. Marks). The House is entitled to guidance from the Secretary of State. The right hon. Gentleman, in addition to dealing with individual authorities, should also come to the House. Hon. Members wish to know his general theory. There seems a danger—I have watched the progress of the Bill in Committee—that the Secretary of State will make decisions on political grounds, and that if he likes an authority on political grounds he will apply criteria different from those for authorities he does not favour. The Under-Secretary of State says that he does not think that what I say is true. My view, in that case, is that it should be shown not to be true.
I should have liked to have seen, as I said on Second Reading, an amendment which would have obliged the Secretary of State to come to the House to obtain approval for the guidelines. Parliament could then have discussed in detail those elements which he regards as important—for example, economic issues. The House, local authorities and PTAs would then have been better served. They would have heard the Secretary of State's arguments, the response of the House and the result of its vote. It would have been much better than a secret determination when no one knows how, why or what the

Secretary of State has considered. My experience in local government tells me that one is unlikely to receive any answers if one asked.
The Government are not providing what we regard as an efficient and effective transport system. In London we have congestion and accidents on the roads. The transport policy followed by the GLC or the PTA in London will have to take congestion into account to a greater degree than any provincial city.
Paragraph 21 of the White Paper states absolutely clearly:
In assessing value for money, account will be talon of the benefits to users of public transport and to other road users in terms of reduced congestion and accidents.
As I pointed out on Second Reading, those words do not appear in the Bill. Why not? They are the most vital elements to be taken into account in London. Part of it is taken into account by clause 4(3)(c) which refers to
the need to achieve a proper balance between the interests of the ratepayers in their area and the interests of transport users 
The clause refers to public transport users. We are back to the old story which began with the GLC. The Government took issue on how the balance was to be struck. Will the Minister say where the Bill refers specifically to the benefits to other road users by reduced congestion and accidents? Are we to take those issues into account?
The Secretary of State asserts continually that he is interested in London and wants to ensure that we have an efficient, effective and, as I have urged from time to time, integrated transport system. If he does not take those factors into account, but only the fiduciary duty of the local authority in terms of the balance between the ratepayer and the public transport user, he cannot achieve the transport policy that we are seeking. We shall continue to have congestion. One cannot without difficulty get into London or the House by car in the morning. Lorries, cars and vans are lined up everywhere. It is chaos.
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The Secretary of State has heard me rehearse this argument many times. My constituency is a rat run from Essex into London, and the Secretary of State should come to my area to see exactly what happens. We must persuade those who use private transport not to come into London and to park in my constituency but to use public transport, either the Underground or the buses. We cannot do that if the only way we can run the public transport system is by trying to find the balance that he will draw between the ratepayer and the user of public transport.
The Secretary of State cannot draw up proper guidelines if he does not include those factors in the Bill. I hope that he will in the House clarify his guidelines. I asked him about it on Second Reading, and I have read most his comments in Committee, but I have yet to he persuaded—apart from his references to fiduciary duty—that he means what he says about the importance of gearing the public transport system to the needs of London.
I speak only for London. I have heard hon. Members speak about other areas that have features common to my area, but London is a special issue. If the Secretary of State is to take political action, whatever he may think of the political masters at County Hall, that is not his job. His job is to help us in London to define a proper, integrated


transport system that will enable us to transport millions of people in the daytime efficiently, effectively and as quickly as we can.
The right hon. Gentleman has a duty tonight, at this late stage in the Bill, to tell the House exactly what factors he is talking about besides those contained in the paragraphs to which I have referred. If he does not do that, those of us who have been trying to obtain assistance for transport in London for many years will feel that all that he has done is to play purely doctrinaire party politics, with no interest in London, and I shall vote against him.

Miss Maynard: The hon. Member for Harrow, West (Mr. Page) referred to amendment No. 20. He objected strongly to the fact that the balance between ratepayers and transport users was not correct. What he really means is that the people whom he represents, who have cars of their own, do not wish to pay a subsidy towards a good, cheap transport policy. But he forgets that, in many cases, ratepayers and transport users are one and the same.

Mr. John Page: The hon. Lady is being very simplistic, because many of the ratepayers in my constituency travel to work in the centre of London every day. However, they object to the unfair way in which the distribution of the burden is placed on the ratepayers instead of the users.

Miss Maynard: This is not the only Bill that affects local authorities. The Government have brought in many Bills to remove money and decision-making from local authorities. Perhaps the hon. Gentleman should consider the Government's responsibility for the problems faced by London rather than attacking the Opposition for the view that we are putting forward tonight.
Amendment No. 22 is one of the most important amendments that we have discussed tonight, because it talks about taking the social and economic position into account. The Opposition believe strongly that the only people who can do that are the elected local representatives who live in the area and who are subjected to the electorate every four or five years.
The Government are not only saying that they want to provide only a certain amount of money, which they are perfectly entitled to do, but they are also saying that they will allow us to contribute only a certain amount of money to public transport. We object to that strongly, particularly in South Yorkshire, where people have consistently elected the local authority over several years on a cheap fares policy.
Sheffield is virtually a one-industry city based on steel. It has been decimated by the depression, by Government policies and by our membership of the EC. If any city ever wanted a cheap fares policy it is Sheffield, part of which I represent. South Yorkshire is based on heavy industry, which again is in a state of depression. As my hon. Friend the Member for Rotherham (Mr. Crowther) said, it is a low-wage area in comparison to many parts of Britain and so the cheap fares policy has been a tremendous boon to people who need such help. It has also been much more than that. It has dealt with the problem that London suffers from more acutely than any other city and to which the hon. Member for Hackney, South and Shoreditch (Mr. Brown) just referred. One only has to walk outside the House to see the terrible problem of congestion, often

caused by one person in a motor car. Cars jam the streets and occupy parking places which must be found for them. Would not it be much more sensible to have a proper integrated cheap public transport system so that those cars are not on the road, congesting the city and fouling and polluting the air? South Yorkshire and Sheffield do not have such congestion and pollution. Equally important, we have fewer accidents. That is important from a human point of view. It is also important in that fewer accidents mean fewer people taking up hospital beds which are already under tremendous pressure.
Because South Yorkshire is a low income area, we have, as my hon. Friend the Member for Rotherham said, fewer car owners. Even when a family owns a car, it is usually the man who must use it, and the woman would be left stranded if it were not for the cheap fares policy. Women can travel about on the buses and do their shopping because the fares are so reasonable. That benefits not only them but the shopping area in the centre of Sheffield. There are so many benefits from such a policy.
As I say, South Yorkshire and Sheffield rely more on public transport than perhaps other areas. The concessions that we have been able to give to children—a quarter of the adult fare—means that they are able to go to sporting and cultural facilities, and they have also been a great help to disabled and old people. In other words, we have tried to look after the people who cannot help themselves. Surely that is the kind of policy we ought to be pursuing.
We have heard much from Conservatve Members about things being cost effective. It seems to me that, where the Government have pursued that policy by not subsidising fares but letting people try to meet the economic fare, buses have been either empty or there have been no buses at all. What is cost effective about such a policy? Surely it is much more cost effective to pursue the kind of policy which we are pursuing in South Yorkshire with cheap fares and full buses. Surely that is a much more sensible policy to pursue.
The Bill is clearly aimed at Labour-controlled local authorities and particularly ones in South Yorkshire. The Government are really saying that they believe in democracy, providing that it produces the results that they want. But in South Yorkshire it has produced a Socialist local authority that pursues Socialist policies. So the Bill is being introduced in order, first, to curb that local authority, and, if that local authority cannot be curbed directly and persuaded by the Bill, the Government's friends in the courts will, they hope, deal with democratically elected Labour-controlled authorities.

Miss Jo Richardson: I hesitated to intervene in the debate because I was not on the Committee which considered the Bill, and therefore I do not feel as expert as some hon. Members. However, I was drawn to make a contribution because I was impressed by amendment No. 22. In particular, I was impressed by the new subsection 3(d), which seeks to provide
the general, social and economic circumstances of the area, including the number of people unemployed, the average level of earnings and the level of car ownership
should be taken into account. I hope that hon. Members will forgive me if I talk about London in this respect, as it is the area that I know best, although the circumstances are relevant to all areas.
Even with the GLC "Fares Fair" policy, which was so neatly knocked on the head by the Tory Government, all in inner London looked with envy at the policies of south


Yorkshire and Sheffield. I know that many people wished that their fare policy could have been used in London long before the "Fares Fair" policy was introduced.
In London, as any hon. Member who looks across the river will know, we have 343,846 people unemployed this month. That figure is displayed on the top of County Hall. I hear from my unemployed constituents of the difficulties that they have, not only because they cannot afford to travel for pleasure, but in travelling around the capital to get a job. There are not many employment opportunities in Barking, and, if they are to be realistic about finding a job, my constituents have to travel to other parts of London.
Even if these people are successful in getting a job in another part of London, they have to calculate whether the money that they will get will enable them to afford the fares to get to work every day. If one lives in Barking and travels to the centre of London to work, it will cost one £13·10 a week, which is about £50 a month, before one pays anything else.
A young woman friend of mine who lives in north London in the same zone as Barking has to pay the same amount to travel. She tells me that she pays more on fares a month, as a single person, than on gas, electricity and food. That is a ridiculous comparison to make.
The hon. Member for Harrow, East—

Mr. John Page: Harrow, West.

Miss Richardson: I beg the hon. Member's pardon. I said east because I once fought Harrow, East, so I know the district well. I was taken aback to hear the hon. Member for Harrow, West (Mr. Page) say that so many of his constituents had it engraved on their hearts how much they hated the "Fares Fair" policy. From my memory of Harrow, East, and from the friends that I have retained there, I should have thought that the people in Harrow were pleased with the policy because it meant that they could travel to London to work, and for pleasurable and cultural occasions, without having to pay tremendous fares. I imagine that the fare from Harrow to London is about the same as that from Barking.
The House should not have to forgive me for speaking about the problems of women living and working in London, because this is a subject that is not often brought up in the House. High fares and low standards of transport affect women disproportionately more than men.
Of the 343,000 unemployed people in London, which is the figure displayed above County Hall, 91,400 are women. That is an unrealistic figure, as a large number of women do not register as unemployed and do not appear in the figures of the Department of Employment.
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Women earn on average, including London weighting, two thirds of a man's wage. Many of them in London, as elsewhere, are working part-time in low-paid, ghetto-type jobs, fitting in the difficulties of travelling across huge

areas of London and performing their home responsibilities. They are severely disadvantaged. In many cases, women have to ask their husbands for money before they can travel to work as they do not have sufficient money to be able to subsidise themselves. Women are unhappy to do that. They want some financial independence.
London has approximately 150,000 one-parent families. The majority of those single parents are women. They suffer hardship from the inability to get jobs in areas in which they can afford to live or to which they can afford to travel.
I am told that one third of registered drivers are women. Men are more likely to travel to work by car than women. Women are more frequent users of public transport. Women try to find jobs as near to their homes as possible because of their family responsibilities. That enables them to return during the day and afternoon to see that their children are at home. Women thus need to use buses for short distances more than men do.
Just over 20 per cent. of one-parent families have a car, compared with 82 per cent. of two-parent families. That is a tremendous disadvantage to the women who comprise the majority of single parents.
Cuts in the frequency and maintenance of transport cause other difficulties for women. Women are subject to violence on the Underground from time to time. I myself find it very difficult to gather up the courage late at night to go home from the House of Commons to Hammersmith on the Underground. I might find myself in a carriage alone or with one or two people whom I do not know. I do not often get scared, but I am apprehensive. I want frequent, well-staffed trains so that people are present to protect travellers from possible violence.
There was a proposal to the effect that the London underground should start half an hour later in the morning and stop half an hour earlier in the evening in order to cut costs. That may sound perfectly reasonable on the face of it, but it would affect women severely because so many of them have to work shifts to fit in with their family responsibilities. Such a development might leave them with no transport at all or waiting for long periods at lonely bus stops only to find that there is no bus either.
I am sure that all hon. Members have seen the very nice women who clean this building. We see them only because we are occasionally here all night. They come in at 5 or 6 o'clock in the morning. How will they get to work if the transport available to thm starts half an hour later? The majority of people who work in cleaning are women. They go to work early in the morning to clean big offices, Government buildings, hospitals and the House of Commons, and such a change in public transport availability would be very hard for them to bear.
One of the aims of the GLC "Fares Fair" policy was to create a vehicle for London Transport recruiting—to provide a better service and at the same time more jobs. The reversal of that policy has had, and will continue to have, a serious effect on recruitment.
London Transport has always claimed to be an "equal opportunities" employer, and I accept that that is its intention, but it has a long way to go before that becomes a reality. At present, 53,470 men and only 6,270 women work on London Transport. As hon. Members may guess, a great proportion of those women work in cleaning, catering and the other typical "women's image" jobs to which they are usually confined.
If we ever have a decent fares and transport policy, for the whole of London, as I hope that we shall under a Labour Government and a Labour GLC, I hope that it will give more women the opportunity to train properly for London Transport jobs as well as giving all the other people in the capital what they want in the form of a proper fares system and a transport policy that allows them to travel to and from work and conduct their personal lives in a civilised way.

Mr. Race: First, I congratulate my right hon. and hon. Friends on the amendment. I hope that my other hon. Friends will not mind if I single out my two women hon. Friends for congratulation, as they highlighted a very significant aspect of transport policy—the fact that it affects different people in different ways. One of the most significant groups to be adversely affected if fares are increased and services reduced will be women, who comprise 52 per cent. of the population. My hon. Friend the Member for Barking (Miss Richardson), in her very lucid speech, set out a number of cogent points which the Secretary of State should take extremely seriously, although I suspect that he will not.
Amendment No. 22 is of great significance. Not only does it try to single out considerations to which a transport authority should have regard before it submits a plan to the Secretary of State: it tries to draw out some of the really significant social factors that might occur in an area. It is up to that transport authority to say whether those factors occur in its area and whether any regard is to be had to them in terms of the grant that is given to the transport executive.
If the GLC was so fortunate as to have amendment No. 22 in the Bill, it would be able to examine the social and economic condition of London and say "Here are some objective criteria by which we can justify reducing fares and improving the service." If we are to discuss objective criteria, it is important that the House knows exactly what is happening in London.
One of the most significant factors in London, to which my hon. Friend the Member for Barking referred, is unemployment. More than 340,000 people are now unemployed in the Greater London area—the largest concentration of people in the country. We must remember that it is not merely the number of unemployed that determines the prosperity of an area. Prosperity is also affected by the number of poor people in an area.
One of the crazy things about the image of London and the south-east in northerners' minds is that they assume that all of the south-east and London is prosperous. They think that it is an area of great plenty as compared with parts of the north and Scotland. There is much truth in some of that, but there is also a great deal of nonsense in

it. There are parts of London where the rate of unemployment and the incidence of poverty are as high as anywhere in the country.

Mr. John Page: I am grateful to the hon. Gentleman for stopping in full flow. Will he comment on what I believe to be a very important point? We have had a great advertisement for Yorkshire today. Does he realise that the chamber of commerce in Sheffield has said that if the rates increase, firms will have to lay people off and that 31 per cent. of the companies there will consider moving from Sheffield? He is trying to bring to London the disaster area problems that have occured there?

Mr. Race: I should take more notice of the hon. Gentleman if I thought that he closely followed our discussions on these matters. It is true that rates in the great conurbations have risen substantially, although from the mid-1970s to now they have not risen faster than the rate of inflation. The Government whom the hon. Gentleman supports have made it difficult for local authorities to do other than raise their rates if they are to play fair with their electors.
For example, the Inner London Education Authority must halve its expenditure if it wants to receive Government grants again. That is a ludicrous proposition, which no sensible councillor would countenance. It would presumably involve closing half of the schools and sacking half of the teachers. It is not possible to make simple economies that amount to half of an authority's expenditure. The penalties that have been imposed on local authorities, especially the ILEA, whose grant has been abolished by the Government, has made it inevitable that rates will rise. If the hon. Member for Harrow, West (Mr. Page) wants to prevent rates rising, he should stop supporting the penalties on elected local councillors who are carrying out their functions and local mandates.

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Mr. Martin Flannery: As a Sheffield Member of Parliament I get all the literature from the chamber of commerce there. Recently there was a threat from a major toy firm in Sheffield that it would have to close. It did not close. When we inquired about it, the firm admitted that it had said that only for the effect that it would produce. People are not moving away from Sheffield because of the rates. We who live there know that to be so.

Mr. Race: I am grateful for the benefit of the superior knowledge of my hon. Friend about Sheffield. I should not dream of intruding on that.
Many thousands of jobs have left the London area, partly because of deliberate plans to relocate industry in the south-east, and partly because of the enormous impact of interest rates and the slump policies of the Government on industry. It ill-behoves Conservative members to come bleating to the House, pretending that it is the nasty Labour-controlled local authorities which are responsible for getting rid of all the jobs in London. What hypocrisy.

Mr. Matthew Parris: rose—

Mr. Race: I shall not give way again, because I must press on.
I was trying to establish that one of the problems London faces and why amendment No. 22 is so important is that within the GLC boundaries there are substantial areas of high poverty. In Committee I quoted to the


Secretary of State for my borough of the number of people receiving supplementary allowances. I thought that I had better check on the current incidence of poverty in my borough, as the parliamentary question which I quoted then referred to April 1982. This very day, 1 February, I received a reply from the hon. Member for Braintree (Mr. Newton), the Under-Secretary of State for Health and Social Security, showing that the incidence of poverty, as reflected in the numbers of people receiving supplementary allowances, had gone up yet again in the London borough of Haringey.
At the Highgate office of the DHSS, the number of persons claiming supplementary allowances was 5,700 in May 1979, and that had gone up to 10,600 in December 1982. At the Wood Green office the relevant numbers were 1,400 in May 1979 and 4,500 in December 1982. At the Tottenham office there were 4,100 claimants of supplementary allowances in May 1979, compared with 8,900 in December 1982. A total of 11,000 households were in receipt of supplementary allowances in May 1979. By December 1982 that had gone up to 24,000, more than doubling the rate of poverty in a typical London borough.
When making its transport policy the GLC ought to consider how many of those people will be able to use private cars to go about their daily business and lives. Not many of the people who are getting £25·50 per week, which is the rate of supplementary allowance for the single person householder, nor of those who have been made redundant—more than 8,000—and become unemployed in the London borough of Haringey over the last three and a half years will have the opportunity to use a private car. It is up to the GLC and to the metropolitan counties to say, "We have not only a high rate of unemployment but a high incidence of poverty."
It is not just a question of the number of people in receipt of the poverty rates of benefit but of those still in jobs. It might interest the hon. Member for Harrow, West to learn that over the years 1970 to 1979, spanning both Labour and Conservative Governments, the proportionate position of the lowest paid workers in London dropped. The real wages of the lowest quartile of London workers dropped between 1970 and 1979, as measured by the family expenditure survey. That is astonishing. Those in London who are still working are becoming lower paid and so have less disposable income to spend on things such as tube fares, bus fares and so on. That is another factor to which the elected local authority must have regard when making its determination for transport.
It is clear from the figures from the Greater London council London Transport travel diary panel that those who use public transport disproportionately are the elderly, the unemployed, students and adults in non car-owning households. I shall give one statistic—19 per cent. of all adults' journeys are on buses, but for the elderly the figure is 41 per cent., which shows that the elderly use the buses disproportionately more than the rest of the population. The unemployed also use buses disproportionately more than the rest of the population. The reason is obvious. They have low incomes. They probably have had a chequered history of employment. They probably had a redundancy in the family or a change in circumstances which made it difficult for them to build up the reserves necessary to buy a motor car. Those are the problems that a metropolitan county or the GLC should consider when making determinations about transport policy.

Mr. John Page: Will the hon. Gentleman give way?

Mr. Race: I should like to, but I must conclude my speech.
The plain facts are that not only are the unemployed, the poor, the elderly and students disadvantaged in our society and in desperate need of public transport to survive, but that people on the lowest incomes spend a disproportionately high amount of their incomes on public transport fares. In 1981, those who earned under £35 a week spent 1·3 per cent. of their household income on bus fares, according to the family expenditure survey, but in households with a weekly income of over £350 a week the proportion of household expenditure on bus fares was only 0·5 per cent. That is not a surprising statistic. It shows yet again that the users of public transport are mainly, but not wholly, those who have great difficulties because of their household income, poverty and disadvantage.
However, that is not to say that the local authority must have regard only to the users of public transport. We must have regard also to all those who gain from good public transport because there is less congestion, fewer accidents on the roads, less lead in the air and a better life for everyone. That is exactly the consideration for a local authoritiy to bear in mind when it makes its plan before it goes to the Secretary of State.
It is clear that the only authority that can make a proper determination of planning policy in the great congested urban area of London is the GLC. Who is to say what the transport planning problems of the whole of London are? The London borough of Harrow could not. My own borough could not. I do not know what the local demand is for improvements to the south circular. No doubt the hon. Member who represents that area holds some views about that. However, a London-wide body must make that determination.
I refer not only to London-wide transport problems but to London-wide planning problems. I shall cite just one example from my constituency. Alexandra Palace burnt down, and my local council is now refurbishing it at a substantial cost, paid for by the insurance. Many people who did not use the palace before will now use it. Thousands of people may use it on one day. Obviously that change in the environment must be reflected in changes in public transport.

Mr. Anthony Berry (Comptroller of Her Majesty's Household): Nonsense.

Mr. Race: The hon. Member for Southgate (Mr. Berry) says that it is nonsense to provide better public transport to Alexandra Palace. We should be glad to hear what he has to say about the subject. I am sure that his constituents will want to know that he does not favour a decent and efficient form of transport.
Local councils must have regard to planning changes if we are to have a decent public transport system. Only they can do it. That is why amendment No. 22 is crucial.

Mr. Eyre: I shall try to reply briefly to the points raised, because I know that the hon. Member for Westhoughton (Mr. Stott) is anxious to speak.
As the hon. Member for Rotherham (Mr. Crowther) knows, clause 4(3) sets out the matters for which the authority is to have particular regard when assessing the executive's plan. They are; first, the cost of the provision of services and facilities, the level of demand and the


benefit to users; secondly, any advice given by the Secretary of State to the executive on the appropriate amount of revenue support, on methods of determining benefits derived from revenue support, on the form and content of the plan, and on the methods of determining costs, levels of demand and benefits to potential users; thirdly, the need to achieve a proper balance between the interests of ratepayers and users.
I noted the great importance that my hon. Friend the Member for Harrow, West (Mr. Page) attached to those requirements. I agree with his assessment in that respect.
In response to a question asked by the hon. Member for Rotherham, I should add that the word "particular" is important for two reasons. First, the matters listed are those to which the authority should pay special regard. Secondly, "particular" makes it clear that if the authority wishes to have regard to other matters, it is free to do so. The omission of the word "particular" could mean that the authority was excluded from considering other matters. For those reasons, the amendment must be resisted.
Amendment No. 22 was referred to by the hon. Member for Rotherham and was strongly supported by the hon. Member for Barking (Miss Richardson), and would insert new paragraphs in clause 4(3) requiring the authority—when taking its decision on the plan—to have regard to matters such as the general social and economic circumstances of the area, the number of unemployed, the level of earnings, car ownership, local plans, and so on. However, the Government would expect a local authority to bear such considerations very much in mind when making decisions on proposals for the development of public transport in their area. They are obviously relevant to the duty to achieve a proper balance between the interests of ratepayers and transport users, imposed by clause 4(3)(c). As the Government would expect the authority to take these and many other matters into account, without an express requirement in the Bill, they are naturally not prepared to accept the amendment. The Government cannot accept the extension of clause 4(3) into a recitation of a massive list of what matters local authorities will have in mind. The speeches of the hon. Members for Wood Green (Mr. Race) and for Barking showed that one can continue to add matters that deserve consideration in this category. My hon. Friend the Member for Southgate (Mr. Berry) is concerned about the additional rates that his constituents will have to pay because of GLC policy. That relates to a point raised by the hon. Member for Wood Green.
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The hon. Member for Rotherham, and other hon. Members representing constituencies in South Yorkshire, made a number of claims about the transport system in that area. They must take into account the challenging point that during the period of transport policy in South Yorkshire that we are considering, it is claimed that the number of passengers rose by 7 per cent. In fact, the acquisition of additional transport operators has added to that total. However, that rise must be considered against the background of the important fact that at the same time there has been an increase of no less than 600 per cent. in subsidies. Is that enormous increase worth while, and can

it be justified by the benefits that have been obtained? South Yorkshire Members of Parliament must bear that question in mind.

Miss Maynard: I wish to point out to the Minister once again that the majority of electors certainly think that it is well worth while.

Mr. Eyre: The hon. Lady knows that domestic ratepayers pay only 19 per cent. of the cost. Therefore, their voting support is more easily commanded. The burden that falls upon the industrial and commercial ratepayers is not reflected because of voting arrangements.
The hon. Member for Rotherham raised a point about planning. Nothing in the Bill prevents authorities from following proper policies. The Bill protects expenditure up to the PEL. It does not prejudice a higher level of expenditure where it is is a proper exercise of power, and nothing in the Bill prevents the carrying out of any duties.

Mr. Crowther: I wish to clarify that point. Is the Minister saying categorically that the South Yorkshire county council, in pursuance of its duty as a structure plan authority, and committed to a cheap bus fare policy approved by the Secretary of State for the Environment, will not fall foul of this legislation if it goes well over the PEL?

Mr. Eyre: I was explaining that the Bill does not prevent an authority from carrying out its duties. The various points raised by the hon. Gentleman need careful examination against that background.
The hon. Member for Manchester, Gorton (Mr. Marks) raised the important question of cost-benefit analysis. My Department is developing the technique of assessing the benefits from any given level of subsidy. For some items it is easy to ascribe a cost benefit, but for others it is more difficult.
The White Paper states:
Subsidy needs to show demonstrable benefits.
That is the question for south Yorkshire. The techniques that we are developing are certainly of interest to authorities, and I shall shortly be making details available to them for their own use in assessing the best use of any given level of revenue support—in particular, in terms of the best balance between fares and service levels. I also regard this work as a useful tool at national level in looking at the value per pound of subsidy yielded in different authorities. This will be one of the factors that I shall have in mind in considering individual authority proposals.
The scope of the model being considered includes a number of factors which can be readily measured and expressed in money terms. This is relevant to the point made by the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who asked about benefits to other road users, to the main question of the hon. Member for Gorton and also to the point made by the hon. Member for Sheffield, Brightside (Miss Maynard) about road congestion. The scope of the model includes the level of revenue support and benefits from changes in service level, changes in fares, trip generation on public transport, transfer of passengers from private to public transport, and reduction in road congestion. The model then deals with other relevant matters. It will show that a great deal of thought is being given to these matters which have been raised in the debate, but I have explained to the hon. Member for Westhoughton why I reject both the amendments to which he spoke.

Mr. Stott: In no way can I do justice to the debate in the time that has been allotted to me. We have to conclude our business by 11.30 pm and I ask my hon. Friends to forgive me if I do not deal with the points they made so succinctly.
I should like to respond to the remarks made by the hon. Member for Harrow, West (Mr. Page). I can recommend to him as good bedtime reading the entire Committee proceedings on the Bill in which he will discover that the rates issue was debated fully and at great length. Interesting information and arguments are referred to in those proceedings. The hon. Gentleman must recognise that rates have consistently represented less than 1 per cent. of industrial costs. The increase in the business rate over the past two years has been broadly in line with the overall increase in industry's material and fuel costs, which is about 38·9 to 44·5 per cent. compared with a truly massive increase of 93·6 per cent. in the interest payments of industry and commerce.
Within the business sector manufacturing has relatively the smallest rate burden. Commerce, the distributive industries, other services and the public utilities pay the highest, yet it is in those sectors that jobs losses have been relatively low. It is incorrect to assume, as the hon. Gentleman assumes, that the rate burden does what he says it does in respect of businesses. There is ample evidence to the contrary and we used arguments to demonstrate it on a number of occasions in Committee.
The amendments are exceedingly sensible. My hon. Friend the Member for Rotherham (Mr. Crowther), drawing on his vast experience as a member of the south Yorkshire county council in the days when the transportation policyx2014;

Mr. Crowther: rose—

Mr. Stott: If I have my hon. Friend's job description wrong, I apologise. My hon. Friend has great experience in local government and set out his arguments cogently.
The provisions of the Bill interlock and there is a common thread. We have been asking, probing and debating with the Secretary of State and Under-Secretary for the past three months on what guidelines which the Secretary of State will eventually issue will be based and how they will be implemented. We have had no satisfactory answer to our questions. In fact, we have all along contended that there is no need for the Bill because the existing legislation is adequate and properly serves the needs of the community.
That was adequately demonstrated when Great Universal Stores took Merseyside county council to court and Mr. Justice Woolf adjudicated that the county council was acting properly within the provisions of the 1969 Act. Only last week a court in London adjudicated that the Greater London Council was acting legally within the Act. There is no reason for the Secretary of State to come before the House on the pretence that clarification of the law is required.
Our amendments seek to ensure that when the plans are being formulated and submitted to the Secretary of State the local authorities shall have specific reference to certain crucial circumstances, as set out in amendment No. 22.
My hon. Friends the Members for Barking (Miss Richardson) and for Wood Green (Mr. Race) have described the problems of unemployment. It is interesting that in the Merseyside case Mr. Justice Woolf made special reference to the subject. He stated:

influence by such considerations as indicated by Mr. Coombes"—
who was at that time chairman of the passenger transport authority—
in paragraph 11 of his affidavit and in particular subparagraph (h) which indicates that he took account of the high cost of public transport and the hardship that that would continue to bring to a sizeable proportion of the county population whose sole source of income is state benefits. Assuming the Council was so influenced, I do not see anything objectionable in law in this. The fact that the Prescott case made it clear that the Council should not adopt a policy of making losses by giving away rights of free travel does not mean that the Council are required to ignore the financial circumstances of the persons for whom the transport service is to be provided. It is no use fixing charges at a level which the customer cannot pay. As long as the Council's predominant purpose in adopting a policy is a proper one, it would not matter if in addition they took into account the fact that it would benefit a hard pressed section of the public.
Those were the words of Mr. Justice Woolf in summing up the Merseyside case. They show that specific provision existed in the 1968 Act for the local authority to maintain a transport policy that had regard to the unemployed. There is no reason, apart from party political, philosophical dogma, for the Secretary of State to bring forward a Bill that seeks to change the law that was created in 1968 and that has been tested in the courts and a law that was created in 1969 that was tested in the court last week. The Bill would be infinitely better if the Under-Secretary of State would accept the amendment. If he does not do so, I invite my hon. Friends to join me in the Lobby.

Mr. Robert Hughes: I beg leave to ask leave to withdraw the amendment.

Amendment, by leave, withdraw.

Amendment proposed: No. 22, in page 4, line 28, at end insert—
'(d) the general, social and economic circumstances of the area, including the number of people unemployed, the average level of earnings and the level of car ownership;
(e) any approved structure plan or local plan or any other relevant town and country planning considerations affecting the area for which the authority is responsible; all other matters referred to in section 9(3) of the 1968 Act. '.—[Mr. Robert Hughes.]

Question put, That the amendment be made:

The House divided: Ayes 236, Noes 293.

Division No. 57]
[11.28 pm


AYES


Abse, Leo
Campbell-Savours, Dale


Adams, Allen
Cant, R. B.


Allaun, Frank
Carmichael, Neil


Anderson, Donald
Cartwright, John


Archer, Rt Hon Peter
Clark, Dr David (S Shields)


Ashley, Rt Hon Jack
Clarke.Thomas (C'b'dge, A'rie)


Ashton, Joe
Cocks, Rt Hon M. (B'stol S)


Atkinson, N. (H'gey,)
Cohen, Stanley


Bagier, Gordon AT.
Coleman, Donald


Barnett, Guy (Greenwich)
Conlan, Bernard


Barnett, Rt Hon Joel (H'wd)
Cox, T. (W'dsw'th, Toot'g)


Beith, A. J.
Crawshaw, Richard


Bennett, Andrew (St'kp't N)
Crowther, Stan


Bidwell, Sydney
Cryer, Bob


Booth, Rt Hon Albert
Cunliffe, Lawrence


Boothroyd, Miss Betty
Cunningham, G. (Islington S)


Bradley, Tom
Cunningham, Dr J. (W'h'n)


Bray, Dr Jeremy
Dalyell, Tarn


Brocklebank-Fowler, C.
Davidson, Arthur


Brown, Hugh D. (Provan)
Davis, Clinton (Hackney C)


Brown, R. C. (N'castle W)
Davis, Terry (B'ham, Stechf'd)


Brown, Ronald W. (H'ckn'y S)
Deakins, Eric


Brown, Ron (E'burgh, Leith)
Dean, Joseph (Leeds West)


Buchan, Norman
Dewar, Donald


Callaghan, Jim (Midd't'n &amp; P)
Dixon, Donald


Campbell, Ian
Dobson, Frank






Dormand, Jack
Maclennan, Robert


Dubs, Alfred
McMahon, Andrew


Duffy, A. E. P.
McNally, Thomas


Dunnett, Jack
McTaggart, Robert


Dunwoody, Hon Mrs G.
McWilliam, John


Eadie, Alex
Magee, Bryan


Eastham, Ken
Marks, Kenneth


Edwards, Ft. (W'hampt'n S E)
Marshall, D (G'gow S'ton)


Ellis, R. (NE D'bysh're)
Marshall, Jim (Leicester S)


Ellis, Tom (Wrexham)
Mason, Rt Hon Roy


English, Michael
Maxton, John


Ennals, Rt Hon David
Maynard, Miss Joan


Evans, John (Newton)
Meacher, Michael


Ewing, Harry
Mikardo, Ian


Faulds, Andrew
Millan, Rt Hon Bruce


Field, Frank
Miller, Dr M. S. (E Kilbride)


Fitch, Alan
Morris, Rt Hon A. (W'shawe)


Flannery, Martin
Morris, Rt Hon C. (O'shaw)


Forrester, John
Morris, Rt Hon J. (Aberavon)


Foster, Derek
Morton, George


Fraser, J. (Lamb'th, N'w'd)
Moyle, Rt Hon Roland


Freeson, Rt Hon Reginald
Mulley, Rt Hon Frederick


Freud, Clement
Newens, Stanley


Garrett, John (Norwich S)
Oakes, Rt Hon Gordon


Garrett, W. E. (Wallsend)
Ogden, Eric


George, Bruce
O'Halloran, Michael


Ginsburg, David
O'Neill, Martin


Golding, John
Orme, Rt Hon Stanley


Gourlay, Harry
Owen, Rt Hon Dr David


Graham, Ted
Palmer, Arthur


Grant, John (Islington C)
Park, George


Hamilton, James (Bothwell)
Parker, John


Hamilton, W. W. (C'tral Fife)
Parry, Robert


Hardy, Peter
Pavitt, Laurie


Harman, Harriet (Peckham)
Pendry, Tom


Harrison, Rt Hon Walter
Penhaligon, David


Hart, Rt Hon Dame Judith
Pitt, William Henry


Hattersley, Rt Hon Roy
Powell, Raymond (Ogmore)


Haynes, Frank
Race, Reg


Heffer, Eric S.
Radice, Giles


Hogg, N. (E Dunb't'nshire)
Rees, Rt Hon M (Leeds S)


Holland, S. (L'b'th, Vauxh'll)
Richardson, Jo


Home Robertson, John
Roberts, Allan (Bootle)


Homewood, William
Roberts, Ernest (Hackney N)


Horam, John
Roberts, Gwilym (Cannock)


Howell, Rt Hon D.
Robertson, George


Hoyle, Douglas
Robinson, G. (Coventry NW)


Huckfield, Les
Rodgers, Rt Hon William


Hughes, Mark (Durham)
Roper, John


Hughes, Robert (Aberdeen N)
Ross, Ernest (Dundee West)


Hughes, Roy (Newport)
Ross, Stephen (Isle of Wight)


Jay, Rt Hon Douglas
Rowlands, Ted


Jenkins, Rt Hon Roy (Hillh'd)
Ryman, John


John, Brynmor
Sandelson, Neville


Johnson, James (Hull West)
Sever, John


Johnson, Walter (Derby S)
Sheerman, Barry


Johnston, Russell (Inverness)
Sheldon, Rt Hon R.


Jones, Rt Hon Alec (Rh'dda)
Shore, Rt Hon Peter


Jones, Barry (East Flint)
Short, Mrs Renée


Jones, Dan (Burnley)
Silkin, Rt Hon J. (Deptford)


Kaufman, Rt Hon Gerald
Silkin, Rt Hon S. C. (Dulwich)


Kerr, Russell
Silverman, Julius


Kilroy-Silk, Robert
Skinner, Dennis


Lambie, David
Smith, Cyril (Rochdale)


Lamond, James
Smith, Rt Hon J. (N Lanark)


Leadbitter, Ted
Spellar, John Francis (B'ham)


Leighton, Ronald
Spriggs, Leslie


Lewis, Arthur (N'ham NW)
Stallard, A. W.


Lewis, Ron (Carlisle)
Stewart, Rt Hon D. (W Isles)


Litherland, Robert
Stoddart, David


Lofthouse, Geoffrey
Stott, Roger


Lyon, Alexander (York)
Strang, Gavin


Lyons, Edward (Bradf'd W)
Straw, Jack


McCartney, Hugh
Summerskill, Hon Dr Shirley


McDonald, Dr Oonagh
Taylor, Mrs Ann (Bolton W)


McElhone, Mrs Helen
Thomas, Jeffrey (Abertillery)


McGuire, Michael (Ince)
Thomas, Dr R. (Carmarthen)


McKay, Allen (Penistone)
Thorne, Stan (Preston South)


McKelvey, William
Tilley, John


MacKenzie, Rt Hon Gregor
Tinn, James





Torney, Tom
Williams, Rt Hon Mrs (Crosby)


Varley, Rt Hon Eric G.
Wilson, Gordon (Dundee E)


Wainwright, E. (Dearne V)
Wilson, Rt Hon Sir H. (H'ton)


Walker, Rt Hon H. (D'caster)
Wilson, William (C'try SE)


Wardell, Gareth
Winnick, David


Weetch, Ken
Woodall, Alec


Wellbeloved, James
Woolmer, Kenneth


Welsh, Michael
Wrigglesworth, Ian


White, J. (G'gow Pollok)
Wright, Sheila


Whitehead, Phillip
Young, David (Bolton E)


Whitlock, William



Wigley, Dafydd
Tellers for the Ayes:


Willey, Rt Hon Frederick
Dr. Edmund Marshall and


Williams, Rt Hon A. (S'sea W)
Mr. Harry Cowans.


NOES


Aitken, Jonathan
Durant, Tony


Alexander, Richard
Eden, Rt Hon Sir John


Alison, Rt Hon Michael
Edwards, Rt Hon N. (P'broke)


Amery, Rt Hon Julian
Eggar, Tim


Ancram, Michael
Elliott, Sir William


Arnold, Tom
Emery, Sir Peter


Aspinwall, Jack
Eyre, Reginald


Atkinson, David (B'm'th,E)
Fairbairn, Nicholas


Baker, Kenneth (St.M'bone)
Fairgrieve, Sir Russell


Baker, Nicholas (N Dorset)
Faith, Mrs Sheila


Beaumont-Dark, Anthony
Farr, John


Bendall, Vivian
Fell, Sir Anthony


Benyon, Thomas (A'don)
Fenner, Mrs Peggy


Benyon, W. (Buckingham)
Finsberg, Geoffrey


Berry, Hon Anthony
Fisher, Sir Nigel


Best, Keith
Fletcher, A. (Ed'nb'gh N)


Bevan, David Gilroy
Forman, Nigel


Biffen, Rt Hon John
Fowler, Rt Hon Norman


Biggs-Davison, Sir John
Fox, Marcus


Blackburn, John
Fraser, Peter (South Angus)


Blaker, Peter
Fry, Peter


Body, Richard
Gardiner, George (Reigate)


Bonsor, Sir Nicholas
Gardner, Sir Edward


Boscawen, Hon Robert
Garel-Jones, Tristan


Bottomley, Peter (W'wich W)
Gilmour, Rt Hon Sir Ian


Bowden, Andrew
Goodhart, Sir Philip


Boyson, Dr Rhodes
Goodhew, Sir Victor


Braine, Sir Bernard
Goodlad, Alastair


Bright, Graham
Gorst, John


Brinton, Tim
Gow, Ian


Brittan, Rt. Hon. Leon
Gower, Sir Raymond


Brooke, Hon Peter
Grant, Sir Anthony


Brotherton, Michael
Gray, Rt Hon Hamish


Browne, John (Winchester)
Greenway, Harry


Bruce-Gardyne, John
Grieve, Percy


Bryan, Sir Paul
Griffiths, Peter (Portsm'th N)


Buchanan-Smith, Rt. Hon. A.
Grist, Ian


Buck, Antony
Grylls, Michael


Budgen, Nick
Gummer, John Selwyn


Bulmer, Esmond
Hamilton, Hon A.


Butler, Hon Adam
Hampson, Dr Keith


Carlisle, John (Luton West)
Hannam, John


Carlisle, Kenneth (Lincoln)
Haselhurst, Alan


Carlisle, Rt Hon M. (R'c'n)
Hastings, Stephen


Chalker, Mrs. Lynda
Havers, Rt Hon Sir Michael


Channon, Rt. Hon. Paul
Hawkins, Sir Paul


Chapman, Sydney
Hawksley, Warren


Churchill, W. S.
Hayhoe, Barney


Clark, Hon A. (Plym'th, S'n)
Heath, Rt Hon Edward


Clark, Sir W. (Croydon S)
Heddle, John


Clegg, Sir Walter
Henderson, Barry


Cockeram, Eric
Heseltine, Rt Hon Michael


Colvin, Michael
Hicks, Robert


Corrie, John
Higgins, Rt Hon Terence L.


Costain, Sir Albert
Hill, James


Cranborne, Viscount
Hogg, Hon Douglas (Gr'th'm)


Critchley, Julian
Holland, Philip (Carlton)


Crouch, David
Hooson, Tom


Dickens, Geoffrey
Hordern, Peter


Dorrell, Stephen
Howe, Rt Hon Sir Geoffrey


Douglas-Hamilton, Lord J.
Howell, Rt Hon D. (G'ldf'd)


Dover, Denshore
Howell, Ralph (N Norfolk)


du Cann, Rt Hon Edward
Hunt, David (Wirral)


Dunn, Robert (Dartford)
Hunt, John (Ravensbourne)






Hurd, Rt Hon Douglas
Peyton, Rt Hon John


Irvine, Rt Hon Bryant Godman
Pollock, Alexander


Irving, Charles (Cheltenham)
Porter, Barry


Jessel, Toby
Prentice, Rt Hon Reg


Johnson Smith, Sir Geoffrey
Price, Sir David (Eastleigh)


Jopling, Rt Hon Michael
Prior, Rt Hon James


Joseph, Rt Hon Sir Keith
Proctor, K. Harvey


Kaberry, Sir Donald
Rathbone, Tim


Kellett-Bowman, Mrs Elaine
Rees, Peter (Dover and Deal)


Kimball, Sir Marcus
Rees-Davies, W. R.


King, Rt Hon Tom
Renton, Tim


Kitson, Sir Timothy
Rhodes James, Robert


Knight, Mrs Jill
Rhys Williams, Sir Brandon


Knox, David
Ridley, Rt Hon Nicholas


Lamont, Norman
Rifkind, Malcolm


Langford-Holt, Sir John
Rippon, Rt Hon Geoffrey


Latham, Michael
Roberts, M. (Cardiff NW)


Lawrence, Ivan
Roberts, Wyn (Conway)


Lawson, Rt Hon Nigel
Rossi, Hugh


Lee, John
Rost, Peter


Lewis, Sir Kenneth (Rutland)
Rumbold, Mrs A. C. R.


Lloyd, Ian (Havant &amp; W'loo)
Sainsbury, Hon Timothy


Lloyd, Peter (Fareham)
St. John-Stevas, Rt Hon N.


Loveridge, John
Shaw, Giles (Pudsey)


Luce, Richard
Shaw, Sir Michael (Scarb')


Lyell, Nicholas
Shelton, William (Streatham)


McCrindle, Robert
Shepherd, Colin (Hereford)


Macfarlane, Neil
Shepherd, Richard


MacGregor, John
Shersby, Michael


MacKay, John (Argyll)
Silvester, Fred


Macmillan, Rt Hon M.
Skeet, T. H. H.


McNair-Wilson, M. (N'bury)
Smith, Sir Dudley


McNair-Wilson, P. (New F'st)
Smith, Tim (Beaconsfield)


McQuarrie, Albert
Speed, Keith


Madel, David
Speller, Tony


Major, John
Spence, John


Marland, Paul
Spicer, Jim (West Dorset)


Marlow, Antony
Spicer, Michael (S Worcs)


Marshall, Michael (Arundel)
Sproat, Iain


Marten, Rt Hon Neil
Squire, Robin


Mates, Michael
Stainton, Keith


Mather, Carol
Stanbrook, Ivor


Maude, Rt Hon Sir Angus
Stanley, John


Mawby, Ray
Steen, Anthony


Mawhinney, Dr Brian
Stevens, Martin


Maxwell-Hyslop, Robin
Stewart, A. (E Renfrewshire)


Mayhew, Patrick
Stewart, Ian (Hitchin)


Mellor, David
Stokes, John


Meyer, Sir Anthony
Stradling Thomas, J.


Miller, Hal (B'grove)
Tapsell, Peter


Mills, Iain (Meriden)
Tebbit, Rt Hon Norman


Mills, Sir Peter (West Devon)
Temple-Morris, Peter


Miscampbell, Norman
Thatcher, Rt Hon Mrs M.


Mitchell, David (Basingstoke)
Thomas, Rt Hon Peter


Moate, Roger
Thompson, Donald


Monro, Sir Hector
Thornton, Malcolm


Montgomery, Fergus
Townend, John (Bridlington)


Moore, John
Trippier, David


Morgan, Geraint
Trotter, Neville


Morris, M. (N'hampton S)
van Straubenzee, Sir W.


Morrison, Hon C. (Devizes)
Vaughan, Dr Gerard


Murphy, Christopher
Viggers, Peter


Myles, David
Waddington, David


Neale, Gerrard
Wakeham, John


Needham, Richard
Waldegrave, Hon William


Neubert, Michael
Walker, Rt Hon P. (W'cester)


Newton, Tony
Walker, B. (Perth)


Normanton, Tom
Walker-Smith, Rt Hon Sir D.


Nott, Rt Hon Sir John
Wall, Sir Patrick


Onslow, Cranley
Waller, Gary


Oppenheim, Rt Hon Mrs S.
Walters, Dennis


Osborn, John
Warren, Kenneth


Page, John (Harrow, West)
Watson, John


Page, Richard (SW Herts)
Wells, Bowen


Parkinson, Rt Hon Cecil
Wells, John (Maidstone)


Parris, Matthew
Wheeler, John


Patten, Christopher (Bath)
Whitelaw, Rt Hon William


Pattie, Geoffrey
Whitney, Raymond


Pawsey, James
Wiggin, Jerry


Percival, Sir Ian
Wilkinson, John





Williams, D. (Montgomery)



Winterton, Nicholas
Tellers for the Noes:


Wolfson, Mark
Mr. John Cope and


Young, Sir George (Acton)
Mr. Ian Lang.


Younger, Rt Hon George

Question accordingly negatived.

It being after half-past Eleven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to order, [17 January] and resolution this day, to put forthwith the Questions necessary to dispose of the amendments moved by a member of the Government.

Amendment proposed: No. 38, in page 8, line 37, clause 10, leave out from 'and' to end of line 38 and insert
'no such determination shall be made by an Authority unless they have been given guidance by the Secretary of State in relation to the determination and that guidance is taken into account by them in making the determination.'.—[Mr. David Howell.]

Question put, That the amendment be made:—

The House divided: Ayes 293, Noes 234.

Division No. 58]
11.41 pm


AYES


Aitken, Jonathan
Costain, Sir Albert


Alexander, Richard
Cranborne, Viscount


Alison, Rt Hon Michael
Critchley, Julian


Amery, Rt Hon Julian
Crouch, David


Ancram, Michael
Dickens, Geoffrey


Arnold, Tom
Dorrell, Stephen


Aspinwall, Jack
Douglas-Hamilton, Lord J.


Atkinson, David (B'm'th,E)
Dover, Denshore


Baker, Kenneth (St.M'bone)
du Cann, Rt Hon Edward


Baker, Nicholas (N Dorset)
Dunn, Robert (Dartford)


Beaumont-Dark, Anthony
Durant, Tony


Bendall, Vivian
Eden, Rt Hon Sir John


Benyon, Thomas (A'don)
Edwards, Rt Hon N. (P'broke)


Benyon, W. (Buckingham)
Eggar, Tim


Berry, Hon Anthony
Elliott, Sir William


Best, Keith
Emery, Sir Peter


Bevan, David Gilroy
Eyre, Reginald


Biffen, Rt Hon John
Fairbairn, Nicholas


Biggs-Davison, Sir John
Fairgrieve, Sir Russell


Blackburn, John
Faith, Mrs Sheila


Blaker, Peter
Farr, John


Body, Richard
Fell, Sir Anthony


Bonsor, Sir Nicholas
Fenner, Mrs Peggy


Boscawen, Hon Robert
Finsberg, Geoffrey


Bottomley, Peter (W'wich W)
Fisher, Sir Nigel


Bowden, Andrew
Fletcher, A. (Ed'nb'gh N)


Boyson, Dr Rhodes
Forman, Nigel


Braine, Sir Bernard
Fowler, Rt Hon Norman


Bright, Graham
Fox, Marcus


Brinton, Tim
Fraser, Peter (South Angus)


Brittan, Rt. Hon. Leon
Fry, Peter


Brooke, Hon Peter
Gardiner, George (Reigate)


Brotherton, Michael
Gardner, Sir Edward


Browne, John (Winchester)
Garel-Jones, Tristan


Bruce-Gardyne, John
Gilmour, Rt Hon Sir Ian


Bryan, Sir Paul
Goodhart, Sir Philip


Buchanan-Smith, Rt. Hon. A.
Goodhew, Sir Victor


Buck, Antony
Goodlad, Alastair


Budgen, Nick
Gorst, John


Bulmer, Esmond
Gow, Ian


Butcher, John
Gower, Sir Raymond


Butler, Hon Adam
Grant, Sir Anthony


Carlisle, John (Luton West)
Gray, Rt Hon Hamish


Carlisle, Kenneth (Lincoln)
Greenway, Harry


Carlisle, Rt Hon M. (R'c'n)
Grieve, Percy


Chalker, Mrs. Lynda
Griffiths, Peter (Portsm'th N)


Channon, Rt. Hon. Paul
Grist, Ian


Chapman, Sydney
Grylls, Michael


Churchill, W. S.
Gummer, John Selwyn


Clark, Hon A. (Plym'th, S'n)
Hamilton, Hon A.


Clark, Sir W. (Croydon S)
Hampson, Dr Keith


Clegg, Sir Walter
Hannam, John


Cockeram, Eric
Haselhurst, Alan


Colvin, Michael
Hastings, Stephen


Corrie, John
Havers, Rt Hon Sir Michael






Hawkins, Sir Paul
Murphy, Christopher


Hayhoe, Barney
Myles, David


Heath, Rt Hon Edward
Neale, Gerrard


Heddle, John
Needham, Richard


Henderson, Barry
Neubert, Michael


Heseltine, Rt Hon Michael
Newton, Tony


Hicks, Robert
Normanton, Tom


Higgins, Rt Hon Terence L.
Nott, Rt Hon Sir John


Hill, James
Onslow, Cranley


Hogg, Hon Douglas (Gr'th'm)
Oppenheim, Rt Hon Mrs S.


Holland, Philip (Carlton)
Osborn, John


Hooson, Tom
Page, John (Harrow, West)


Hordern, Peter
Page, Richard (SW Herts)


Howe, Rt Hon Sir Geoffrey
Parkinson, Rt Hon Cecil


Howell, Rt Hon D. (G'ldf'd)
Parris, Matthew


Howell, Ralph (N Norfolk)
Patten, Christopher (Bath)


Hunt, David (Wirral)
Pattie, Geoffrey


Hunt, John (Ravensbourne)
Pawsey, James


Hurd, Rt Hon Douglas
Percival, Sir Ian


Irvine, Rt Hon Bryant
Pollock, Alexander


Godman
Porter, Barry


Irving, Charles (Cheltenham)
Prentice, Rt Hon Reg


Jessel, Toby
Price, Sir David (Eastleigh)


Johnson Smith, Sir Geoffrey
Prior, Rt Hon James


Jopling, Rt Hon Michael
Proctor, K. Harvey


Joseph, Rt Hon Sir Keith
Rathbone, Tim


Kaberry, Sir Donald
Rees, Peter (Dover and Deal)


Kellett-Bowman, Mrs Elaine
Rees-Davies, W. R.


Kimball, Sir Marcus
Renton, Tim


King, Rt Hon Tom
Rhodes James, Robert


Kitson, Sir Timothy
Rhys Williams, Sir Brandon


Knight, Mrs Jill
Ridley, Hon Nicholas


Knox, David
Rifkind, Malcolm


Lamont, Norman
Rippon, Rt Hon Geoffrey


Langford-Holt, Sir John
Roberts, M. (Cardiff NW)


Latham, Michael
Roberts, Wyn (Conway)


Lawrence, Ivan
Rossi, Hugh


Lawson, Rt Hon Nigel
Rost, Peter


Lee, John
Rumbold, Mrs A, C. R.


Lewis, Sir Kenneth (Rutland)
Sainsbury, Hon Timothy


Lloyd, Ian (Havant &amp; W'loo)
St. John-Stevas, Rt Hon N.


Lloyd, Peter (Fareham)
Shaw, Giles (Pudsey)


Loveridge, John
Shaw, Sir Michael (Scarb')


Luce, Richard
Shelton, William (Streatham)


Lyell, Nicholas
Shepherd, Colin (Hereford)


McCrindle, Robert
Shepherd, Richard


Macfarlane, Neil
Shersby, Michael


MacGregor, John
Silvester, Fred


MacKay, John (Argyll)
Skeet, T. H. H.


Macmillan, Rt Hon M.
Smith, Sir Dudley


McNair-Wilson, M. (N'bury)
Smith, Tim (Beaconsfield)


McNair-Wilson, P. (New F'st)
Speed, Keith


McQuarrie, Albert
Speller, Tony


Madel, David
Spence, John


Major, John
Spicer, Jim (West Dorset)


Marland, Paul
Spicer, Michael (S Worcs)


Marlow, Antony
Sproat, Iain


Marshall, Michael (Arundel)
Squire, Robin


Marten, Rt Hon Neil
Stainton, Keith


Mates, Michael
Stanbrook, Ivor


Mather, Carol
Stanley, John


Maude, Rt Hon Sir Angus
Steen, Anthony


Mawby, Ray
Stevens, Martin


Mawhinney, Dr Brian
Stewart, A. (E Renfrewshire)


Maxwell-Hyslop, Robin
Stewart, Ian (Hitchin)


Mayhew, Patrick
Stokes, John


Mellor, David
Stradling Thomas, J.


Meyer, Sir Anthony
Tapsell, Peter


Miller, Hal (B'grove)
Tebbit, Rt Hon Norman


Mills, Iain (Meriden)
Temple-Morris, Peter


Mills, Sir Peter (West Devon)
Thatcher, Rt Hon Mrs M.


Miscampbell, Norman
Thomas, Rt Hon Peter


Mitchell, David (Basingstoke)
Thompson, Donald


Moate, Roger
Thornton, Malcolm


Monro, Sir Hector
Townend, John (Bridlington)


Montgomery, Fergus
Trippier, David


Moore, John
Trotter, Neville


Morgan, Geraint
van Straubenzee, Sir W.


Morris, M. (N'hampton S)
Vaughan, Dr Gerard


Morrison, Hon C. (Devizes)
Viggers, Peter





Waddington, David
Whitelaw, Rt Hon William


Wakeham, John
Whitney, Raymond


Waldegrave, Hon William
Wiggin, Jerry


Walker, Rt Hon P. (W'cester)
Wilkinson, John


Walker, B. (Perth)
Williams, D. (Montgomery)


Walker-Smith, Rt Hon Sir D.
Winterton, Nicholas


Wall, Sir Patrick
Wolfson, Mark


Waller, Gary
Young, Sir George (Acton)


Walters, Dennis
Younger, Rt Hon George


Warren, Kenneth



Watson, John
Tellers for the Ayes:


Wells, Bowen
Mr. John Cope and


Wells, John (Maidstone)
Mr. Ian Lang.


Wheeler, John



NOES


Abse, Leo
Ennals, Rt Hon David


Adams, Allen
Evans, John (Newton)


Allaun, Frank
Ewing, Harry


Anderson, Donald
Faulds, Andrew


Archer, Rt Hon Peter
Field, Frank


Ashley, Rt Hon Jack
Fitch, Alan


Ashton, Joe
Flannery, Martin


Atkinson, N. (H'gey,)
Forrester, John


Bagier, Gordon A. T.
Foster, Derek


Barnett, Guy (Greenwich)
Fraser, J. (Lamb'th, N'w'd)


Barnett, Rt Hon Joel (H'wd)
Freeson, Rt Hon Reginald


Beith, A. J.
Freud, Clement


Bennett, Andrew (St'kp't N)
Garrett, John (Norwich S)


Bidwell, Sydney
Garrett, W. E. (Wallsend)


Booth, Rt Hon Albert
George, Bruce


Boothroyd, Miss Betty
Ginsburg, David


Bradley, Tom
Golding, John


Bray, Dr Jeremy
Gourlay, Harry


Brocklebank-Fowler, C.
Graham, Ted


Brown, Hugh D. (Provan)
Grant, John (Islington C)


Brown, R. C. (N'castle W)
Hamilton, James (Bothwell)


Brown, Ronald W. (H'ckn'y S)
Hamilton, W. W. (C'tral Fife)


Brown, Ron (E'burgh, Leith)
Hardy, Peter


Buchan, Norman
Harman, Harriet (Peckham)


Callaghan, Jim (Midd't'n &amp; P)
Harrison, Rt Hon Walter


Campbell, Ian
Hart, Rt Hon Dame Judith


Campbell-Savours, Dale
Hattersley, Rt Hon Roy


Cant, R. B.
Haynes, Frank


Carmichael, Neil
Heffer, Eric S.


Cartwright, John
Hogg, N. (E Dunb't'nshire)


Clark, Dr David (S Shields)
Holland, S. (L'b'th, Vauxh'll)


Clarke, Thomas (C'b'dge, A'rie)
Home Robertson, John


Cocks, Rt Hon M. (B'stol S)
Homewood, William


Cohen, Stanley
Horam, John


Coleman, Donald
Howell, Rt Hon D.


Conlan, Bernard
Hoyle, Douglas


Cowans, Harry
Huckfield, Les


Cox, T. (W'dsw'th, Toot'g)
Hughes, Mark (Durham)


Crawshaw, Richard
Hughes, Robert (Aberdeen N)


Crowther, Stan
Hughes, Roy (Newport)


Cryer, Bob
Jay, Rt Hon Douglas


Cunliffe, Lawrence
Jenkins, Rt Hon Roy (Hillh'd)


Cunningham, G. (Islington S)
John, Brynmor


Cunningham, Dr J. (W'h'n)
Johnson, James (Hull West)


Dalyell, Tam
Johnson, Walter (Derby S)


Davidson, Arthur
Johnston, Russell (Inverness)


Davis, Clinton (Hackney C)
Jones, Rt Hon Alec (Rh'dda)


Davis, Terry (B'ham, Stechf'd)
Jones, Barry (East Flint)


Deakins, Eric
Jones, Dan (Burnley)


Dean, Joseph (Leeds West)
Kaufman, Rt Hon Gerald


Dewar, Donald
Kerr, Russell


Dixon, Donald
Kilroy-Silk, Robert


Dobson, Frank
Lambie, David


Dormand, Jack
Lamond, James


Dubs, Alfred
Leadbitter, Ted


Duffy, A. E. P.
Lewis, Arthur (N'ham NW)


Dunnett, Jack
Lewis, Ron (Carlisle)


Dunwoody, Hon Mrs G.
Litherland, Robert


Eadie, Alex
Lofthouse, Geoffrey


Eastham, Ken
Lyon, Alexander (York)


Edwards, R. (W'hampt'n S E)
Lyons, Edward (Bradf'd W)


Ellis, R. (NE D'bysh're)
McDonald, Dr Oonagh


Ellis, Tom (Wrexham)
McElhone, Mrs Helen


English, Michael
McGuire, Michael (Ince)






McKay, Allen (Penistone)
Rowlands, Ted


McKelvey, William
Ryman, John


MacKenzie, Rt Hon Gregor
Sandelson, Neville


Maclennan, Robert
Sever, John


McMahon, Andrew
Sheerman, Barry


McNally, Thomas
Sheldon, Rt Hon R.


McTaggart, Robert
Shore, Rt Hon Peter


McWilliam, John
Short, Mrs Renée


Magee, Bryan
Silkin, Rt Hon J. (Deptford)


Marks, Kenneth
Silkin, Rt Hon S. C. (Dulwich)


Marshall, D(G'gow S'ton)
Silverman, Julius


Marshall, Dr Edmund (Goole)
Skinner, Dennis


Marshall, Jim (Leicester S)
Smith, Cyril (Rochdale)


Mason, Rt Hon Roy
Smith, Rt Hon J. (N Lanark)


Maxton, John
Spellar, John Francis (B'ham)


Maynard, Miss Joan
Spriggs, Leslie


Meacher, Michael
Stallard, A. W.


Mikardo, Ian
Stoddart, David


Millan, Rt Hon Bruce
Stott, Roger


Miller, Dr M. S. (E Kilbride)
Strang, Gavin


Morris, Rt Hon A. (W'shawe)
Straw, Jack


Morris, Rt Hon C. (O'shaw)
Summerskill, Hon Dr Shirley


Morris, Rt Hon J. (Aberavon)
Taylor, Mrs Ann (Bolton W)


Morton, George
Thomas, Jeffrey (Abertillery)


Moyle, Rt Hon Roland
Thomas, Dr R. (Carmarthen)


Mulley, Rt Hon Frederick
Thorne, Stan (Preston South)


Newens, Stanley
Tilley, John


Oakes, Rt Hon Gordon
Tinn, James


Ogden, Eric
Torney, Tom


O'Halloran, Michael
Varley, Rt Hon Eric G.


O'Neill, Martin
Wainwright, E. (Dearne V)


Orme, Rt Hon Stanley
Walker, Rt Hon H. (D'caster)


Owen, Rt Hon Dr David
Wardell, Gareth


Palmer, Arthur
Weetch, Ken


Park, George
Welsh, Michael


Parker, John
White, J. (G'gow Pollok)


Parry, Robert
Whitehead, Phillip


Pavitt, Laurie
Whitlock, William


Pendry, Tom
Wigley, Dafydd


Penhaligon, David
Willey, Rt Hon Frederick


Pitt, William Henry
Williams, Rt Hon A. (S'sea W)


Powell, Raymond (Ogmore)
Williams, Rt Hon Mrs (Crosby)


Race, Reg
Wilson, Gordon (Dundee E)


Radice, Giles
Wilson, Rt Hon Sir H. (H'ton)


Rees, Rt Hon M (Leeds S)
Wilson, William (C'try SE)


Richardson, Jo
Winnick, David


Roberts, Allan (Bootle)
Woodall, Alec


Roberts, Ernest (Hackney N)
Woolmer, Kenneth


Roberts, Gwilym (Cannock)
Wrigglesworth, Ian


Robertson, George
Wright, Sheila


Robinson, G. (Coventry NW)
Young, David (Bolton E)


Rodgers, Rt Hon William



Roper, John
Tellers for the Noes:


Ross, Ernest (Dundee West)
Mr. Hugh McCartney and


Ross, Stephen (Isle of Wight)
Mr. Ron Leighton.

Question accordingly agreed to.

Amendment made: No. 39, in page 8, line 42, clause 10, at end insert—
'(4) For the purpose of section 2 above in its application to an accounting period of an Executive ending before 1st April 1984 there shall be disregarded any deficit or potential deficit to the extent to which it is or is to be covered by the appropriation of any reserves of the Executive available for the purpose if, at any time before or after the passing of this Act but before the Secretary of State gives his guidance to the Authority under subsection (2) above, the Executive have notified the Secretary of State of their intention to appropriate those reserves for that purpose.'.—[Mr. David Howell.]

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. David Howell.]

Mr. Booth: In the 11 weeks since Second Readings, we have had to attempt three major exercises. At the Bill was produced simultaneously with the White Paper, we have not only had to examine the Bill within the truncated

timescale allowed by the guillotine but have had to conduct the debate on the White Paper and the consultation with metropolitan authorities and the GLC which would have been carried out before proceedings commenced on the Bill if the normal timescale had been observed in producing the White Paper and introducing the Bill.
The White Paper "Public Transport Subsidy in Cities" set out three aims for the Bill. It says that the Bill will remove
uncertainties about the role and legality of subsidy … ensure better value for money since Authorities will be encouraged to seek greater efficiency by reviewing and if necessary reforming management structures. And it will develop further opportunities for the private sector to provide urban passenger transport and ancillary services".
No year could be allowed to pass by the Conservative Government without some piece of legislation with the aim of privatisation and public asset stripping.
On Second Reading, the Secretary of State also set out three aims for the Bill, but the last differed from that in the White Paper and, in our view, was clearly vindictive.
He said that the Bill
clarifies the law on subsidy support for public transport
and will
improve the efficiency and value for money performance of our public transport systems in cities".
Finally, he said that it was a Bill
to discourage city authorities from the reckless course on which some of them have been set, with their excessive commitment to high rates, which destroy jobs with deadly efficiency, and to ultra-low fares which destabilise our transport systems".—[Official Report, 15 November 1982; Vol. 32, c. 41–2.]
We have examined those claims to the extent possible in Committee proceedings drastically curtailed by the guillotine and we find that in practice the Bill fails in all those aims.
According to the Government, the Bill will clarify the law after the appalling judgment by the Law Lords 15 months ago which destroyed the GLC "Fares Fair" policy and Mr. Justice Woolf's judgment on the Merseyside cheap fares policy. The metropolitan authorities made it clear that they would prefer to live with the Woolf judgment which gave them a clear legal basis on which to operate. The GLC was the only authority effectively covered by the Lords judgment, so if there was any need for legislation it was for a simple Bill to create for the GLC exactly the legal position of the metropolitan authorities. The GLC would have asked for no more from the Government. What it got, however, was not just a grave worsening of its own situation but a wrecking of the legal situation of metropolitan authorities as well.
Local authorities and their passenger transport authorities must have powers to make decisions on fare levels and general transport policy. Instead, the Government have introduced a Bill more in the spirit of the Law Lords judgment than with that of Mr. Justice Woolf's judgment. Far from clarifying the law, the Bill is an invitation to hostile individuals, companies and Conservative local authorities to challenge the GLC and metropolitan authorities in the courts if the authorities exceed the unattainably low public expenditure levels that can be set for them by an anti-public transport Conservative Secretary of State. It is likely that there will be more rather than fewer court cases under this Bill as opposed to the legislation that preceded it. The judges will have to resolve more conflicts between the Secretary of State's guidance and local authorities' statutory duties under the 1968 and 1969 legislation.

Mr. Stevens: Anyone listening to the right hon. Gentleman talking about an anti-transport Secretary of State might be deluded into supposing that subsidies to transport under the present Administration were lower in the United Kingdom than elsewhere. As I am sure the right hon. Gentleman knows, they are higher as a percentage of gross national product than in many developed countries such as the United States, France and Australia. I hope that he will agree that it is misleading to talk as if my right hon. Friend is anti-public transport. He clearly is not.

Mr. Booth: I do not believe that it is misleading. I did not mean to imply that I considered that the actions of the Secretary of State for Transport were out of character with those of his Conservative predecessor. Both of them have consistently pursued policies detrimental to public transport. If one examines the overall support of transport by the Governments of almost any European country, one will find that they have a commitment to sustaining public transport that goes right against the policy that is being pursued by the British Government.
If the Bill is passed, the judges will be asked to make more of the same type of political judgment that the Law Lords made. The Bill is asking the courts to limit the local electoral mandate in public transport. It is a sad day for local democracy and the House when we are called upon to pass a Bill that circumscribes the actions of local democracy in an important public service. It lowers the value of the House as a guardian of local democratic rights by defining a law that prevents those democratic rights from being exercised properly.
I shall now deal with the second aim of the Bill as declared by the Secretary of State—value for money. The Government say that the Bill will improve efficiency in public transport by forcing local authorities to review and reform local management structures, and by making them put services out to tender. One of the victims of the guillotine was proper consideration in Committee of clauses 7 and 8 which deal with management structures and tendering.
It is worth drawing attention to the fact that we are not alone in examining the Bill. Others have possibly examined parts that we have not debated in more detail. One example is the Chartered Institute of Transport, the director general of which wrote to the Secretary of State on 18 January 1983. With regard to this part of the Bill, he said:
it is greatly to be regretted that the White Paper gives such prominence (para 3) to the two 'red herrings' of reforming management structures and private sector participation … We recognise there is validity in the encouragement of more accountable units, but the existing powers provide quite sufficient leverage on Executives to adopt an appropriate business and management structure.
When outside bodies have reviewed the management structures of PTAs, they have usually reported favourably on them. A case in point is the report by the Monopolies and Mergers Commission on the west midlands. As for privatisation, the private sector is only interested in profitable routes and their ancillary activities. Any change would be at the expense of less-used services such as off-peak, weekend and night services. I also fear that any such change would be at the expense of the work force in lower wages and worse conditions of employment.
The third aim of the Bill has now been discovered to be one of sheer political spite against local authorities. The Secretary of State gave the game away on Second Reading when he attacked what he called
the reckless course on which some of them have been set."—
[Official Report, 15 November 1982; Vol. 32, c. 42.] My hon. Friends and I would call it a determination to sustain and improve transport services, to maintain their ridership and to raise the quality of services.
The Bill is an attack on the success of Labour metropolitan authorities which have run, or tried to run, low fares policies. The Secretary of State knows that transport in big cities needs subsidies. The subsidy level in Britain—here I part company with the hon. Member for Fulham (Mr. Stevens)—is usually lower than in big cities abroad. The subsidy in Paris is about 56 per cent. of operating costs compared with 25 per cent. in London.
The Secretary of State also knows that low fares encourage ridership and are popular with the general public. He is opposed to low fares because they are effective in increasing public transport usage and because they have won public acclaim for Labour authorities.
Even more, the Bill is an attack upon local democracy. Yet more power is being taken from local government by central Government. Local government is increasingly being run from Whitehall. The Bill does not clarify the law. It will provide more work for lawyers. It will open the door yet again to privatisation and asset strippers. It will undermine local democracy for the sake of bashing Labour metropolitan authorities, which are winning support for good public transport services.
Further, the Bill represents ministerial interference in an attempt to prevent elected local representatives from shaping the services which they know are needed for their area and which have the support of local voters. It will make no contribution to the real need to prevent the collapse of public transport. If the Bill completes its passage through Parliament, it will be in the teeth of our opposition and in the clear knowledge that our aim must be to repeal it.

Mr. Parris: This is an awkward Bill, transparent enough in its purpose, but oblique, if not opaque, in the manner of its accomplishment. I can see my right hon. Friend's dilemma. He is faced with run-away subsidies by authorities which send the lion's share of the bill to him and to the unfranchised business community.
There are two logical choices open to him. He could make the local voter pay for his bus service, through rates or fares—that would be his choice, not Whitehall's—or he could take control of public transport away from the local authority, pay for it centrally and control it centrally. My right hon. Friend has shrunk from the choice. So he must. It is part of a pressing and wider constitutional question of which transport is only one aspect. It has faced successive Cabinets and they have reacted by shuffling tiers and boundaries as other people shuffle their feet.
My right hon. Friend's unhappy lot is to apply this sticking plaster Bill. It is a Bill which wants to take the reins of local transport planning but does not want to say so, and falls a little short of doing so. We are left with a rather confusing triangular paper shuffle between passenger transport authorities, passenger transport


executives and central Government. It is a Bill which wants to reduce local transport subsidies but does not quite say so, though it will probably succeed in doing so.
It is a Bill which wants to offer protection from legal challenge to those who wish to take it. That purpose it does bear on its face and will achieve. Less certain is the status of the subsidy which goes outside the Bill's protection. My right hon. Friend has half implied that this uncertainty is a weapon of government. That is a doctrine of which I am a little doubtful.
In short, it is a Bill to which one offers the same welcome as one might give to the finger of the little Dutch boy in the sea wall. One is relieved to see it in place without being absolutely certain that it is the right instrument for its purpose.

Mr. Robert Parry: I oppose the Third Reading of the Bill. Being a Merseyside Member, I should like to address myself mainly to the situation facing the communities on Merseyside. I did not serve on the Committee, although I served on the last two transport Bill Committees. I should like to place on record my thanks and the thanks of my Merseyside colleagues and the people of Merseyside to my hon. Friend the Member for Manchester, Gorton (Mr. Marks), who kept an eye on the proceedings on behalf of the Merseyside people. I assure my hon. Friend that his efforts have been greatly appreciated.
The misconceptions of the Government lie in their argument that the need for subsidy is due to temporary problems in falling passenger levels. However, the fact is that rising fares and cuts in services have caused a greater fall in bus travel than the increase in private motoring on Merseyside during the past 10 years.
I refer to the High Court hearing brought against the Merseyside county council by Great Universal Stores. My hon. Friend the Member for Westhoughton (Mr. Stott) quoted the judge at great length. I shall quote an important sentence. The judge said that
It is no use fixing charges at a level which the customer cannot pay.
I agree. After receiving hundreds of letters of protest from constituents and commuters—I am certain that many other of my hon. Friends have also received such letters—it is clear to me that the general public also agree with the judge's view. The judge found in favour of the county council and judged that the county's subsidies on public transport were not illegal.
The Labour party, before the 1981 county council elections, included in its manifesto a pledge that it would bring in fair fares. Notwithstanding the fact that the Labour party got a massive majority, after regaining control of the council it considered the proposal afresh on its merits before it decided to implement the present fare levels.
The Government seem to ignore the fact that in areas such as Merseyside massive unemployment and falling populations had led to a drop in bus travel before the new fares were approved. The new fares brought back many commuters on to the buses. If the Bill goes through and the county is forced to increase the fares again, we will go back on the old merry-go-round. Eventually, we will start losing many passengers and commuters on the buses.
As has been said by many of my hon. Friends, the poorest of our community will suffer through the Bill. The

people who will suffer could be the unemployed, the low-paid, the pensioners and the disabled. The Government recently published the figures from the 1981 census. It showed that the highest level of unemployment in 623 constituencies in England, Scotland and Wale s was in mine, with nearly 45 per cent. unemployment. The census also showed that of all the constituencies in England, Scotland and Wales, mine, in inner Liverpool, was one of the highest for non car-ownership. If the Bill becomes law, thousands of Merseyside people will have to go on their bikes. That is what Ministers often tell us.
This Tory Government appear to be hell bent on destroying the infrastructure and economy of all our regions, including Merseyside, Tyneside, Clydebank and South Wales, through their deliberate monetarist policies and their inflexible approach.
I shall deal briefly with the provisions concerning the writing off of debts due from the National Dock Labour Board. Most of the debate has concentrated, rightly, on transport, but I have several important points to make about the debts that have been written off on behalf of the Mersey Docks and Harbour Company or the port of Liverpool. The amount of money being written off involves the severance of registered dock workers under the Jones Aldington agreement. Although we, and in particular the port of Liverpool, appreciate the Government's gesture, they must realise that the dockers have, as a result of a voluntary agreement, given up jobs in their thousands to try to make the ports of London and Liverpool competitive.
In 1982 alone, 809 registered dock workers, and 997 non-registered workers, accepted severance in Liverpool. On 15 December, in a reply in the House, the Secretary of State said that the Government were not prepared to make any further grants available to the two ports after the end of 1982. I must inform, advise and remind Ministers of the additional costs that have been caused to many British ports, especially Liverpool, through dredging and conservancy. I led a deputation to the previous Secretary of State for Transport. We pointed out that those in the industry, including the dock workers and the Transpor and General Workers Union, had advised us that continental ports receive subsidies and grants from their Governments. However, our Government will give nothing to the ports that need them if they are to remain competitive against foreign ports.
I should comment on the application by the promoters of the development of a new container terminal at Falmouth. The Under-Secretary will remember that Members of Parliament for Merseyside, my colleagues and the national and local officers of the TGWU had a meeting with him just before Christmas. I remind him that we sincerely hope that a statement will be made in the near future to the effect that the Government will not give the application any support. It would seem to be crazy, and to be the economics of the madhouse. Over the years, the Government have made grants amounting to tens and millions of pounds to the port of Liverpool. If the application for Falmouth is accepted, it could sound the death knell for the terminal at Seaforth. That would be the end of Liverpool. It is crazy to consider that application when it could mean the end of the great city and port of Liverpool.

Mr. Peter Griffiths: I congratulate my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State on the achievement of the Bill in introducing a more businesslike procedure into the organisation of transport in the metropolitan counties. I also congratulate them on the courteous way in which they conducted debates and discussions both in the Chamber and in Committee, despite the exaggerated and extreme attacks that have been made on the Bill by Opposition Members.
It is not for me to comment on the Opposition's tactics, but the unfairness of some of their attacks was clearly revealed in the comments of the right hon. Member for Barrow-in-Furness (Mr. Booth). He said that because of the guillotine, we had been denied the opportunity to discuss clauses 7 and 8. The list of amendments shows that the Opposition did not table amendments to clause 7. Had they not taken so disproportionately a long time in rehearsing the same tired arguments that we heard in Committee, there was no reason why we could not have discussed the amendments tabled to clause 8.
It was a pity that a short, fairly straightforward, Bill was subjected to a guillotine. It was also a pity that the way in which the guillotine operated meant that the Bill was not discussed equally in each of its clauses and sections. Again, the responsibility for that lies entirely with the Opposition, who devoted a disproportionate amount of time to clause 2—and even to clause 1, which is only explanatory—spending hour after hour in repetitive discussion about individual metropolitan counties. If the time that was given to the Bill—well over 100 hours of discussion—had been spread evenly over the clauses, there was no reason why the Bill should not have been discussed fully, to the reasonable satisfaction of both sides of the House.

Mr. Booth: Will the hon. Gentleman look at the amendment paper for today and examine amendments Nos. 33, 34 and 35? They are amendments to clause 8, dealing with the question of tendering. There was not time to debate them. We had to withdraw a number of amendments even to get as far as we did under the guillotine.

Mr. Griffiths: The right hon. Gentleman's intervention demonstrates the difficulty of Conservative Members in having any rational dialogue with Opposition Members. I clearly said—no doubt it will be recorded in Hansard tomorrow—that the right hon. Gentleman complained that we had not had discussions on clauses 7 and 8. I said that the Opposition had not tabled any amendments to clause 7. The right hon. Gentleman clearly did not listen, so he should not intervene. The record will speak for itself tomorrow.
We have established a businesslike relationship between the transport authority, the transport executive and the Secretary of State. In a normal business, the job of the management would be to deal with the management function, and the job of the board of directors would be to carry out the overall supervision and receive reports from management. That will be the relationship between the authority and the executive. But they must, of course, at all times have regard to one other major factor in addition to that of the needs of the local electorate, that

being the overriding importance of the national interest. The Opposition entirely failed to address themselves to that matter.
One grave omission in the hour after hour of repetitive discussion led by the Opposition is that they have spoken about fares and the frequency of operation but have missed one vital point—the actual quality of the service offered. That is the one thing that would draw passengers pack to public transport. It is disproportionately expensive to bring them back by subsidy. The right way is to offer a better quality of service—a matter to which the Opposition have manifestly failed to address themselves.
We should be grateful to my right hon. Friend and my hon. Friend the Under-Secretary for the way in which they have presented the Bill and defended it against unfair and exaggerated attacks. The House should be grateful to them, and, eventually, the country will be also.

Mr. Crowther: I am happy to assure the hon. Member for Portsmouth, North (Mr. Giffiths) that there is no better bus service in this country than that in south Yorkshire. If he cares to come to find out how good it is, instead of sitting here criticising, he will perhaps learn a great deal. Of course, having a good service involves paying for it. It is not had for nothing. The people of south Yorkshire have chosen the way in which they wish it to be paid for. The tragedy is that the Bill will overturn their wishes, expressed time after time through the ballot box.
I was rather nauseated by the hon. Gentleman's sycophancy in congratulating the Ministers on getting the Bill through the House. With their majority, they could hardly fail to do so. I have found it a sad and depressing experience. As we have said many times, the Bill strikes at the very heart of local democracy, but it does so in a unique way.
We have seen many attacks on local authorities during the present Parliament. We have seen many instances of the Secretary of State for the Environment punishing ratepayers by withholding grants. The Bill is unique because at least the Secretary of State for the Environment has not chosen to put councillors in peril of being surcharged and made bankrupt for carrying out the wishes of their electors. That is what the Bill does. The Secretary of State made that crystal clear in the White Paper, even if it is not spelt out in the Bill. My hon. Friends have drawn attention to that in our long debates on the Bill.
I have always had an inexpressibly deep attachment to the principle of local democracy, which, I remind hon. Members, is a great deal older than Parliament. I am possibly the only Member of the House who can claim to be representing the town in which he was twice elected mayor. I am rather proud of my involvement in local democracy, and I hate to see this type of attack being made on it and the old traditions being whittled away by the Government.
It is manifestly absurd to pretend that the Secretary of State is better qualified than the elected representatives to decide on the level of service that is to be applied in any area, whether it be transport of any other service.

Mr. Stevens: Does the right worshipful Member agree that the tradition which has been whittled away and which the Bill seeks to reintroduce is the tradition that local authorities voluntarily accept the spending constraints recommended by the Government?

Mr. Crowther: If the hon. Gentleman had known anything about the history of local government he would not have made that remark. The tradition has been that authorities are elected and carry out the wishes of those who elected them. They do not have Secretary's of State breathing down their necks and telling them what they can do. That has been happening for the past three years and I find that tragic.
No one pretends that elected authorities are always right. Sometimes they make the wrong decisions, but that is part of the business of democracy—the right to be wrong so long as one has been elected. If an authority makes a decision that the electors do not like, in the long run the electors will throw it out. I trust sincerely that in the long run the electors will throw out the Secretary of State, along with the rest of this rag, tag and bobtail Government, who have already been in office far too long and have done a great deal of damage to us.
The Bill will have serious consequences in all the metropolitan counties, but in south Yorkshire it will be nothing short of disastrous if the so-called guidance, which the Secretary of State has already indicated in his White Paper, is followed. I have tried to find out from the Under-Secretary what the Government imagine the law will be with regard to an authority such as South Yorkshire, which, in order to carry out its statutory duties, must exceed the guidance figure laid down by the Secretary of State.
The Under-Secretary of State assured me that no authority would be prevented from carrying out its duty. However, he stopped short of saying that in carrying out this duty the South Yorkshire county council would still be protected against being taken to court. If it is the Government's wish that the county council should be allowed to carry out its duty, the Secretary of State should double his proposed guidance figure, because £80 million rather than £40 million will be needed for the county council to carry out its proper planning function.
There has been a great deal of debate. I have uttered more than 10 words on the subject. I shall therefore not pursue the matter further. This is a disgraceful Bill and it should be consigned to oblivion, along with the Government who introduced it.

Mr. Bevan: There is sincerity on both sides of the House in the attitudes of hon. Members towards transport. A difference arises when one tries to put in perspective the mix that should benefit from subsidy. The Opposition believe in unlimited and general subsidy. My right hon. and hon. Friends concede that there has to be a subsidy for public transport, but the public do not separate themselves into different compartments. The traveller is the same man who pays rates and who contributes towards the education of his children. He is possibly the same man who receives benefit as an old-age pensioner or as a disabled person in concessionary fares.
The concessionary fare is unaltered. So are the benefits for old-age pensioners especially in the west midlands, on the railway and the buses. My right hon. and hon. Friends have stated that these matters are not affected. We are therefore left debating the quantum of the subsidy. In three years, the subsidy has increased from £200 million to £400 million. That is a considerable sum. If the subsidies requested generally were allowed, the sum would amount to £700 million next year. The public, I am certain, will

say that this is too much. Their attitude in the west midlands is that the executive already runs a good service on a low subsidy of £25·4 million. It rose substantially from £19·6 million the previous year. If a demand is made for the subsidy to rise to £40 million, the public will say that it is too much when tested against a background of what has to be spent on education. It is axiomatic that, just as the metropolitan county councils can precept upon the rate of the district authority, that size of increase would incur about £40 million in extra subsidy and fines. It would prevent the district council from putting another £4 million into the education of the traveller's children.
We have a good service which should be allowed to continue. We should not pay absolute homage to all the demands of the metropolitan county council transport authorities. Their only function is to run transport. We cannot bisect that function from the other functions of local authorities. Nor can we bisect that function from the overall necessity to reduce or contain public expenditure for the greater good of the public. The man who has to educate his children is the same man who at the end of the day pays the rates bill.
There should have been a fifth box on the pink form which was sent out by the West Midlands county council, and if it had said "If you pick the other four boxes and say that you do not want fares to be increased, and services cut, you want the Bill altered and so on, and do you want your rates to go up by this amount to cover the unrestricted continuous demands of the West Midlands county council?" I am certain that the ratepayer would have put a large tick in that box.
The ratepayer would have agreed, as we shall agree, even though some of us had doubts about some of the clauses, that the Bill is designed to protect a local authority from legal proceedings and protect the ratepayer from unwarranted expenditure.

Mr. Ronald W. Brown: The hon. Member for Birmingham, Yardley (Mr. Bevan) has it wrong. The Bill does not protect anyone, and it is extraordinary to hear him argue that.
We must remember that the Bill was not introduced in order to improve transport; it was started as an attack on the GLC.

Mr. David Howell: What?

Mr. Brown: The Secretary of State says "What?". On Second Reading he told us that he introduced it in order to clarify the position arising from the Law Lords judgment. I told him then that I did not believe he understood what he was doing—

Mr. Howell: The hon. Gentleman said that was started as an attack on the GLC. That is wholly untrue. When he continued, he said something different.

Mr. Brown: The Secretary of State may say that it is wholly untrue, but we heard what he said on Second Reading. I challenged him then. One does not want to rehearse all the arguments, but that is where it began. It was nothing to do with improving transport.
Many problems for many people in different parts of the country have arisen from the Secretary of State's proposals for getting the GLC into shape. My right hon. Friend the Member for Crosby (Mrs. Williams) made it clear that Merseyside, which has had a first-class transport system,


is now likely to have to increase fares by 40 per cent. because the Secretary of State wanted to attack the GLC. He cannot justify what he has done.
The Under-Secretary said that the model that they will work on to determine the various factors involved to reach the guidelines that the Secretary of State will produce will take in this, that and the other. May I remind the Under-Secretary that Greater London has a greater number of travellers than anywhere else. Our travel-to-work area is greater than anywhere else. We are dealing with millions of people in London. How can he suggest that the model which is being proposed for the country as a whole is suitable for London? Similarly, one cannot have a model that is suitable for London and apply it to the rest of the country. To state that the Department is working on a model which will then be the national norm is an example of why London hospitals, local government, schools and transport have suffered so much. A national norm is applied to the capital which is not normal. I asked the Under-Secretary to spell out some of the factors to be included in the guidelines but he did not do so. If he suggests that traffic congestion and accidents are relevant in the model, why have they not been included in the Bill? It is no good saying that there were too many other factors to include them in the Bill, if they can be included in the model.
The Bill is bad because it was not designed for transport. It was designed to be petulant and to force some silly little confrontations with local government. This Government will go down in history as the only Government for years who have tried to fight local government and do their best to destroy it. If anyone remembers the Bill, it will not be for its contribution to transport but for the way that the Government have attempted to destroy democracy in local government.

Mr. Flannery: I come from south Yorkshire, and the issue at stake for me is whether, after this Bill, we shall have a thriving and living local transport system or whether we shall strike it such a blow that its death will become imminent for all local people. The vehicle for achieving the latter is the violation of local democracy, which is what the Bill proposes.
Central Government are completely responsible for high fares, not local government. The hon. Member for Birmingham, Yardley (Mr. Bevan) talked absolute guff about subsidies, as though the Conservative party is against subsidies. Farmers receive two-thirds of their money from public subsidies. The Conservative party subsidises the wealthy on a grand scale.

Mr. Bevan: rose—

Mr. Flannery: No, I am not giving way. I did not make a fool of myself by talking such nonsense. I am talking about reality. When people say such things, they should use their thinking capacity even slightly to get at the truth.
It is not high local rates but the brutal economic policies of the Government that are creating a desert in our area. If Conservative Members do not know that, they should come to see the thriving transport system in our area. Some talk as though the subsidies mean everything, but we never hear about the ordinary humane benefits of a good

transport system. Old people, who used to have to sit at home, are now travelling about on a grand scale. The unemployed can visit their relatives because of the low fares. All children can travel cheaply. Those human benefits that cannot be costed in the terms in which the Conservative party always talks about the subject are the result.
The Government know that, if they land in difficulty, a group of judges will always bale them out. In the Tameside case, it was said that the Tory authority had included in its manifesto, and therefore had to carry it out, a threat to destroy comprehensive education. The Master of the Rolls said that, but he reversed his decision in the GLC case and said that everything included in the manifesto need not be carried out. We had double standards from the tame judges.
Local democracy in south Yorkshire is such that each year this policy is put before the electorate, which votes in many Labour members and only a handful of Tory members. There is only one Tory Member of Parliament in south Yorkshire. The blow now being delivered is aimed at south Yorkshire as well as at the GLC. Many people in my area will be watching this debate. They will stigmatise the Government for what they are—a Government who are for the rich and against ordinary people, who want higher fares on a grand scale, who talk of subsidies, and who have increased prescription charges 600 per cent. since they took office. That is why the ordinary people would throw the Bill out if they had the opportunity and would have cheap transport in every area.

Mr. Les Huckfield: I rise to speak briefly, in view of the shortage of time. For those hon. Members who served on the Standing Committee, the more we go into the Bill the worse it becomes and, most worrying, the less clear it becomes. It is least clear to the Secretary of State. In every debate in Committee, it became less clear with every piece of paper that he was passed to read out. Even today we had the insertion of yet another Government amendment on the point of retrospection and that underlines the fact that the Government are still not clear about the legal intentions and interpretation of the Bill.
Local transport authorities will now have to make calculations on rates and precepts on figures and other calculations which may come into being if the Bill is enacted, yet because of the way in which the Secretary of State has introduced his amendment on retrospection they could be forced to take into account the calculations in the Bill.
As I have said before, it is intolerable to expect locally elected councillors to make sensible transport decisions when they will be asked to take into account simple calculations which may become law if the Bill is enacted. That is the kind of legal precedent that the Secretary of State is making.
The Secretary of State cannot say how the figures in the guidelines in the White Paper are calculated. A deputation from the West Midlands metropolitan county council went to see him before Christmas to probe in depth how he had arrived at the calculations on which his guidelines were based. The simple fact that emerged was that the Secretary of State and his officials simply did not know. The truth is that the guidelines upon which local authorities are expected to make their precepts and take into their


calculations are based on sheer political malice and spite. Local authorities are asked to take into account guidelines which are based purely on the Secretary of State's politics.
The matter gets worse because the Secretary of State and the Under-Secretary of State keep telling us that once the Bill is on the statute book the balance will be about right. But they have already got a Monopolies and Mergers Commission report on the West Midlands metropolitan county council which went into the whole question of balance between the passenger transport authority and the passenger transport executive. It also went into the relationship with Government Departments. Even before the Bill, the commission said that the balance was about right. All the experience that we have of the relationship between the passenger transport executives, the passenger transport authorities and the Department of Transport shows that even without this legislation the relationship is working well, so why disturb it? Why touch it? Why upset it?
Because with every sitting of the Committee the legal interpretations became more complex, one is led to conclude that every time the Secretary of State opens his mouth we go deeper into the legal jungle. Nothing that he has said has clarified the Bill. Certainly some of the things that the Under-Secretary of State has said have not clarified the Bill at all.
We are now entering an area where not only are the legal consequences unclear but the levels of fare increases and changes which could be occasioned by the Bill are not clear either. So we are entering into a period of utter legal and economic uncertainty and it is all caused by the Bill. One only hopes that the Lords will see a point of principle in order that they can reject the Bill. I only hope that Conservative Members will see some sense and recognise that there are some good features in the arguments that we have put forward. If they cannot, I hope that they will pass the arguments on to their friends in another place.

Mr. Stevens: Right hon. and hon. Members will long since have forgotten the remarks of the hon. Member for Sheffield, Hillsborough (Mr. Flannery). I rise to point out that in his peroration he made an error of fact.
The hon. Gentleman told the House that the GLC was carrying out the programme set out in the Labour manifesto, but it introduced a "Fares Fair" policy which went more than one-third further in terms of cost cutting than the manifesto recommended. This demonstrates the difficulties that my hon. Friends have had, both in the House and in Committee. One is facing people whose love of dialectical materialism leads them to exaggerate and twist words in a way that makes response almost impossible.

Mr. David Howell: As we come to the end of our debate on the Third Reading of the Bill, it is right that I should intervene, as I have not yet had the opportunity to do so.
No one disputes the case for subsidy for local transport operations, and subsidy, as has been recognised by the Government, on a scale larger than anything contemplated, recognised or practised in the 1970s. Nor can anyone dispute, and nor has anyone disputed, the enormous growth in the pace of that subsidy. As my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan)

said, the subsidy was £200 million three years ago, £400 million this year, and if the bids were allowed to proceed unchecked next year we should see a growth to £700 million of subsidy on current public transport operations in the metropolitan county areas.
It is the business ratepayers who will be the missing guests at this subsidy feast. We have heard a great deal from right hon. and hon. Members during the discussion of the Bill, both on the Floor of the House and in Committee, but many have evaded the fact that the subsidy has to be paid for, and largely paid for not by the ratepayers who vote, but by the ratepayers who do not vote. Furthermore, it has been suggested—

Mr. Cryer: On a point of Order, Mr. Deputy Speaker.

Mr. Deputy Speaker (Mr. Bernard Weatherill): I hope that it is not a point of order that is an intervention.

Mr. Cryer: It is a point of order, Mr. Deputy Speaker. Will you confirm that the record of the Committee sittings is available to the public, who can there see that time after time the Opposition placed on record their concern with rate expenditure and demolished the argument about the business ratepayer?

Mr. Deputy Speaker: I can confirm that.

Mr. Howell: The concern is noted. The business ratepayer pays for a substantial part of these subsidies.
Furthermore, it is argued that this is just the policy of the present Government, as though it were not the case, as it is, that previous Governments, especially the Labour Government, argued strongly against excessive subsidies. When the right hon. Member for Stockton (Mi. Rogers) was Secretary of State for Transport—he is now a Social Democrat—he argued strongly against excessive subsidies.
The Opposition have taken a different view today. Over a year ago, after the Bromley judgment, they demanded a reinstatement of the "Fares Fair" policy. That policy was called in the courts, hasty, ill-considered, unlawful and an arbitrary use of power. The Opposition want the hasty, ill-considered and unlawful use of power to be reinstated in Greater London. The Government make no apology for rejecting that proposition.
We recognise that there is a need for legislation. The GLC has argued strongly that there should be legislation. The Association of Metropolitan Authorities did not seek legislation, but the Merseyside judgment did not go to appeal and the west midlands had to change its policies in the face of legal threats. There is no doubt in the minds of those who recognise the enormous growth in subsidy that the dangers of legal challenge are present and could increase if the Bill were not enacted. The need for clarification and stabilisation through a change in the law has been present all the time.
The difficulty has been the misleading and inaccurate propaganda put about—largely outside the House, at the expense of ratepayers, and based on assertions without any foundation. A prime example of this concerns concessionary fares. The aspect of the campaign against the Bill that has caused me most distress is the untrue assertion that the Bill threatens concessionary fares. This suggestion, which was without foundation, was printed, distributed and put around in a way that caused distress, anxiety and worry to the elderly and the disabled. I do not know what kind of opposition that is supposed to be. It certainly does not reflect the values that this House ought to support.
The second charge—and it is a serious one—is that the Bill is an attack on local democracy. The hon. Member for Rotherham (Mr. Crowther) repeated that charge in this debate, but it is not correct. The authorities remain free to set the level of grants and fares.
It is a travesty of local democracy to argue that business ratepayers can feel protected through the ballot box. We have heard again and again the assertion that the electors should decide and choose. The electors are not the same people as the ratepayers. It is the business ratepayers who largely finance these policies. Local democracy is whittled away when many ratepayers do not have a vote in the expenditure of their money. We therefore make no apology for refusing to protect unlimited subsidies. That, apparently, is what the Opposition wish to do, but we have refused to do that in the Bill.
The Bill protects a very substantial level of support. There have been repeated questions about how the initial guidance will be set and how the process will be organised. I have been accused of not seeking consultation. That is untrue. Consultation was sought with the Association of Metropolitan authorities as long ago as July, but most unwisely, instructed its members to refuse to consult the Government on how the planning procedure should work.
The Bill offers a substantial level of protection to metropolitan authorities seeking to pay local transport subsidies. That protection did not exist before, but it is now being provided. Those authorities that wish to work within the protected expenditure limits will be protected and safe from legal challenge. The legal stability will be present, which previously was lacking.
Secondly, the Bill institutes sensible procedures so that ratepayers will know far better than they have known in the past what value for money they are getting from the colossal sums being spent. Passenger transport executives can seek private tendering for transport services as well. I believe that that is a desirable improvement.
Thirdly, the Bill aims to place a limit and restraint on the explosive growth of public transport current subsidies. It does so because of the figures that I mentioned earlier and because business ratepayers, who have no vote, have suffered colossal rate increase and great damage has been caused to employment. At a time when it should be the aim of all hon. Members to encourage employment, machinery has been in action which has undermined employment by increasing business rates, which are now the largest single cost to business and a direct attack on employment.
For that reason, the Bill is urgently needed and I have no hesitation in commending it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 286, Noes 229.

Division No 59]
[1.0 am


AYES


Aitken, Jonathan
Benyon, Thomas (A'don)


Alexander, Richard
Benyon, W. (Buckingham)


Alison, Rt Hon Michael
Best, Keith


Amery, Rt Hon Julian
Bevan, David Gilroy


Ancram, Michael
Biffen, Rt Hon John


Arnold, Tom
Biggs-Davison, Sir John


Aspinwall, Jack
Blackburn, John


Atkinson, David (B'm'th, E)
Blaker, Peter


Baker, Kenneth (St. M'bone)
Body, Richard


Baker, Nicholas (N Dorset)
Bonsor, Sir Nicholas


Beaumont-Dark, Anthony
Boscawen, Hon Robert


Bendall, Vivian
Bottomley, Peter (W'wich W)





Bowden, Andrew
Hampson, Dr Keith


Boyson, Dr Rhodes
Hannam, John


Braine, Sir Bernard
Haselhurst, Alan


Bright, Graham
Hastings, Stephen


Brinton, Tim
Havers, Rt Hon Sir Michael


Brittan, Rt. Hon. Leon
Hawkins, Sir Paul


Brooke, Hon Peter
Hawksley, Warren


Brotherton, Michael
Hayhoe, Barney


Browne, John (Winchester)
Heddle, John


Bruce-Gardyne, John
Henderson, Barry


Bryan, Sir Paul
Heseltine, Rt Hon Michael


Buchanan-Smith, Rt. Hon. A.
Hicks, Robert


Buck, Antony
Higgins, Rt Hon Terence L.


Budgen, Nick
Hill, James


Bulmer, Esmond
Hogg, Hon Douglas (Gr'th'm)


Butcher, John
Holland, Philip (Carlton)


Carlisle, John (Luton West)
Hooson, Tom


Carlisle, Kenneth (Lincoln)
Hordern, Peter


Carlisle, Rt Hon M. (R'c'n)
Howe, Rt Hon Sir Geoffrey


Chalker, Mrs. Lynda
Howell, Rt Hon D. (G'ldf'd)


Channon, Rt. Hon. Paul
Howell, Ralph (N Norfolk)


Chapman, Sydney
Hunt, David (Wirral)


Churchill, W. S.
Hunt, John (Ravensbourne)


Clark, Hon A. (Plym'th, S'n)
Hurd, Rt Hon Douglas


Clark, Sir W. (Croydon S)
Irvine, Rt Hon Bryant Godman


Clegg, Sir Walter
Irving, Charles (Cheltenham)


Cockeram, Eric
Johnson Smith, Sir Geoffrey


Colvin, Michael
Jopling, Rt Hon Michael


Cope, John
Joseph, Rt Hon Sir Keith


Corrie, John
Kaberry, Sir Donald


Costain, Sir Albert
Kellett-Bowman, Mrs Elaine


Cranborne, Viscount
Kitson, Sir Timothy


Critchley, Julian
Knight, Mrs Jill


Crouch, David
Knox, David


Dickens, Geoffrey
Lamont, Norman


Dorrell, Stephen
Lang, Ian


Douglas-Hamilton, Lord J.
Langford-Holt, Sir John


Dover, Denshore
Latham, Michael


du Cann, Rt Hon Edward
Lawrence, Ivan


Dunn, Robert (Dartford)
Lawson, Rt Hon Nigel


Durant, Tony
Lee, John


Eden, Rt Hon Sir John
Lewis, Sir Kenneth (Rutland)


Edwards, Rt Hon N. (P'broke)
Lloyd, Ian (Havant &amp; W'loo)


Eggar, Tim
Lloyd, Peter (Fareham)


Elliott, Sir William
Loveridge, John


Emery, Sir Peter
Luce, Richard


Eyre, Reginald
Lyell, Nicholas


Fairbairn, Nicholas
McCrindle, Robert


Fairgrieve, Sir Russell
Macfarlane, Neil


Faith, Mrs Sheila
MacGregor, John


Farr, John
MacKay, John (Argyll)


Fell, Sir Anthony
Macmillan, Rt Hon M.


Fenner, Mrs Peggy
McNair-Wilson, M. (N'bury)


Finsberg, Geoffrey
McNair-Wilson, P. (New F'st)


Fisher, Sir Nigel
McQuarrie, Albert


Fletcher, A. (Ed'nb'gh N)
Madel, David


Forman, Nigel
Major, John


Fowler, Rt Hon Norman
Marland, Paul


Fox, Marcus
Marlow, Antony


Fraser, Peter (South Angus)
Marshall, Michael (Arundel)


Fry, Peter
Marten, Rt Hon Neil


Gardiner, George (Reigate)
Mates, Michael


Gardner, Sir Edward
Maude, Rt Hon Sir Angus


Garel-Jones, Tristan
Mawby, Ray


Gilmour, Rt Hon Sir Ian
Mawhinney, Dr Brian


Goodhart, Sir Philip
Maxwell-Hyslop, Robin


Goodhew, Sir Victor
Mayhew, Patrick


Goodlad, Alastair
Mellor, David


Gorst, John
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Sir Anthony
Mills, Sir Peter (West Devon)


Gray, Rt Hon Hamish
Miscampbell, Norman


Greenway, Harry
Mitchell, David (Basingstoke)


Grieve, Percy
Moate, Roger


Griffiths, Peter (Portsm'th N)
Monro, Sir Hector


Grist, Ian
Montgomery, Fergus


Grylls, Michael
Moore, John


Gummer, John Selwyn
Morgan, Geraint


Hamilton, Hon A.
Morris, M. (N'hampton S)






Morrison, Hon C. (Devizes)
Spicer, Michael (S Worcs)


Murphy, Christopher
Sproat, Iain


Myles, David
Squire, Robin


Neale, Gerrard
Stainton, Keith


Needham, Richard
Stanbrook, Ivor


Neubert, Michael
Stanley, John


Normanton, Tom
Steen, Anthony


Onslow, Cranley
Stevens, Martin


Oppenheim, Rt Hon Mrs S.
Stewart, A. (E Renfrewshire)


Osborn, John
Stewart, Ian (Hitchin)


Page, John (Harrow, West)
Stokes, John


Page, Richard (SW Herts)
Stradling Thomas, J.


Parkinson, Rt Hon Cecil
Tapsell, Peter


Parris, Matthew
Tebbit, Rt Hon Norman


Patten, Christopher (Bath)
Temple-Morris, Peter


Patten, John (Oxford)
Thatcher, Rt Hon Mrs M.


Pattie, Geoffrey
Thomas, Rt Hon Peter


Pawsey, James
Thompson, Donald


Percival, Sir Ian
Thornton, Malcolm


Pollock, Alexander
Townend, John (Bridlington)


Porter, Barry
Trippier, David


Prentice, Rt Hon Reg
Trotter, Neville


Price, Sir David (Eastleigh)
van Straubenzee, Sir W.


Prior, Rt Hon James
Vaughan, Dr Gerard


Proctor, K. Harvey
Viggers, Peter


Rathbone, Tim
Waddington, David


Rees-Davies, W. R.
Wakeham, John


Renton, Tim
Waldegrave, Hon William


Rhodes James, Robert
Walker, Rt Hon P. (W'cester)


Rhys Williams, Sir Brandon
Walker, B. (Perth)


Ridley, Hon Nicholas
Walker-Smith, Rt Hon Sir D.


Rifkind, Malcolm
Wall, Sir Patrick


Rippon, Rt Hon Geoffrey
Waller, Gary


Roberts, M. (Cardiff NW)
Walters, Dennis


Roberts, Wyn (Conway)
Warren, Kenneth


Rossi, Hugh
Watson, John


Rost, Peter
Wells, Bowen


Rumbold, Mrs A. C. R.
Wells, John (Maidstone)


Sainsbury, Hon Timothy
Wheeler, John


St. John-Stevas, Rt Hon N.
Whitelaw, Rt Hon William


Shaw, Sir Michael (Scarb')
Whitney, Raymond


Shelton, William (Streatham)
Wiggin, Jerry


Shepherd, Colin (Hereford)
Wilkinson, John


Shepherd, Richard
Williams, D. (Montgomery)


Shersby, Michael
Winterton, Nicholas


Silvester, Fred
Wolfson, Mark


Skeet, T. H. H.
Young, Sir George (Acton)


Smith, Dudley
Younger, Rt Hon George


Smith, Tim (Beaconsfield)



Speed, Keith
Tellers for the Ayes:


Speller, Tony
Mr. Anthony Berry and


Spence, John
Mr. Carol Mather.


Spicer, Jim (West Dorset)



NOES


Abse, Leo
Callaghan, Jim (Midd't'n &amp; P)


Adams, Allen
Campbell, Ian


Allaun, Frank
Campbell-Savours, Dale


Anderson, Donald
Cant, R. B.


Archer, Rt Hon Peter
Carmichael, Neil


Ashley, Rt Hon Jack
Cartwright, John


Ashton, Joe
Clark, Dr David (S Shields)


Atkinson, N. (H'gey,)
Clarke, Thomas (C'b'dge, A'rie)


Bagier, Gordon A.T.
Cocks, Rt Hon M. (B'stol S)


Barnett, Guy (Greenwich)
Cohen, Stanley


Barnett, Rt Hon Joel (H'wd)
Coleman, Donald


Beith, A. J.
Conlan, Bernard


Bennett, Andrew (St'kp't N)
Cowans, Harry


Bidwell, Sydney
Cox, T. (W'dsw'th, Toot'g)


Booth, Rt Hon Albert
Crawshaw, Richard


Boothroyd, Miss Betty
Crowther, Stan


Bradley, Tom
Cryer, Bob


Bray, Dr Jeremy
Cunliffe, Lawrence


Brocklebank-Fowler, C.
Cunningham, G. (Islington S)


Brown, Hugh D. (Provan)
Cunningham, Dr J. (W'h'n)


Brown, R. C. (N'castle W)
Dalyell, Tam


Brown, Ronald W. (H'ckn'y S)
Davidson, Arthur


Brown, Ron (E'burgh, Leith)
Davis, Clinton (Hackney C)


Buchan, Norman
Davis, Terry (B'ham, Stechf'd)





Deakins, Eric
McKelvey, William


Dean, Joseph (Leeds West)
MacKenzie, Rt Hon Gregor


Dewar, Donald
Maclennan, Robert


Dixon, Donald
McMahon, Andrew


Dobson, Frank
McNally, Thomas


Dormand, Jack
McTaggart, Robert


Dubs, Alfred
McWilliam, John


Duffy, A. E. P.
Magee, Bryan


Dunnett, Jack
Marks, Kenneth


Dunwoody, Hon Mrs G.
Marshall, D (G'gow S'ton)


Eadie, Alex
Marshall, Dr Edmund (Goole)


Eastham, Ken
Marshall, Jim (Leicester S)


Edwards, R. (W'hampt'n S E)
Mason, Rt Hon Roy


Ellis, R. (NE D'bysh're)
Maxton, John


Ellis, Tom (Wrexham)
Maynard, Miss Joan


English, Michael
Meacher, Michael


Ennals, Rt Hon David
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Ewing, Harry
Miller, Dr M. S. (E Kilbride)


Faulds, Andrew
Morris, Rt Hon A. (W'shawe)


Field, Frank
Morris, Rt Hon C. (O'shaw)


Flannery, Martin
Morris, Rt Hon J. (Aberavon)


Forrester, John
Moyle, Rt Hon Roland


Foster, Derek
Mulley, Rt Hon Frederick


Fraser, J. (Lamb'th, N'w'd)
Newens, Stanley


Freeson, Rt Hon Reginald
Oakes, Rt Hon Gordon


Freud, Clement
Ogden, Eric


Garrett, John (Norwich S)
O'Halloran, Michael


Garrett, W. E. (Wallsend)
O'Neill, Martin


George, Bruce
Orme, Rt Hon Stanley


Golding, John
Owen, Rt Hon Dr David


Gourlay, Harry
Palmer, Arthur


Graham, Ted
Park, George


Grant, John (Islington C)
Parker, John


Hamilton, James (Bothwell)
Parry, Robert


Hamilton, W. W. (C'tral Fife)
Pavitt, Laurie


Hardy, Peter
Pendry, Tom


Harman, Harriet (Peckham)
Penhaligon, David


Harrison, Rt Hon Walter
Pitt, William Henry


Hart, Rt Hon Dame Judith
Powell, Raymond (Ogmore)


Hattersley, Rt Hon Roy
Race, Reg


Haynes, Frank
Radice, Giles


Heffer, Eric S.
Rees, Rt Hon M (Leeds S)


Holland, S. (L'b'th, Vauxh'll)
Richardson, Jo


Home Robertson, John
Roberts, Allan (Bootle)


Homewood, William
Roberts, Ernest (Hackney N)


Howell, Rt Hon D.
Roberts, Gwilym (Cannock)


Howells, Geraint
Robertson, George


Hoyle, Douglas
Robinson, G. (Coventry NW)


Huckfield, Les
Rodgers, Rt Hon William


Hudson Davies, Gwilym E.
Roper, John


Hughes, Mark (Durham)
Ross, Ernest (Dundee West)


Hughes, Robert (Aberdeen N)
Rowlands, Ted


Hughes, Roy (Newport)
Ryman, John


Jay, Rt Hon Douglas
Sandelson, Neville


Jenkins, Rt Hon Roy (Hillh'd)
Sever, John


John, Brynmor
Sheerman, Barry


Johnson, James (Hull West)
Sheldon, Rt Hon R.


Johnson, Walter (Derby S)
Shore, Rt Hon Peter


Johnston, Russell (Inverness)
Short, Mrs Renée


Jones, Barry (East Flint)
Silkin, Rt Hon J. (Deptford)


Jones, Dan (Burnley)
Silkin, Rt Hon S. C. (Dulwich)


Kaufman, Rt Hon Gerald
Silverman, Julius


Kerr, Russell
Skinner, Dennis


Kilroy-Silk, Robert
Smith, Cyril (Rochdale)


Lambie, David
Smith, Rt Hon J. (N Lanark)


Lamond, James
Snape, Peter


Leadbitter, Ted
Spellar, John Francis (B'ham)


Leighton, Ronald
Spriggs, Leslie


Lewis, Arthur (N'ham NW)
Stallard, A. W.


Lewis, Ron (Carlisle)
Stoddart, David


Litherland, Robert
Stott, Roger


Lofthouse, Geoffrey
Strang, Gavin


Lyon, Alexander (York)
Straw, Jack


Lyons, Edward (Bradf'd W)
Summerskill, Hon Dr Shirley


McCartney, Hugh
Taylor, Mrs Ann (Bolton W)


McDonald, Dr Oonagh
Thomas, Jeffrey (Abertillery)


McElhone, Mrs Helen
Thomas, Dr R. (Carmarthen)


McGuire, Michael (Ince)
Thorne, Stan (Preston South)


McKay, Allen (Penistone)
Tilley, John






Tinn, James
Williams, Rt Hon Mrs (Crosby)


Torney, Tom
Wilson, Gordon (Dundee E)


Varley, Rt Hon Eric G.
Wilson, Rt Hon Sir H. (H'ton)


Wainwright, E. (Dearne V)
Wilson, William (C'try SE)


Walker, Rt Hon H. (D'caster)
Winnick, David


Wardell, Gareth
Woodall, Alec


Weetch, Ken
Woolmer, Kenneth


Welsh, Michael
Wright, Sheila


White, J. (G'gow Pollok)
Young, David (Bolton E)


Whitehead, Phillip



Whitlock, William
Tellers for the Noes:


Wigley, Dafydd
Mr. George Morton and


Willey, Rt Hon Frederick
Mr. Norman Hogg.

Question accordingly agreed to.

Bill read the Third time and passed.

EMPLOYMENT

Ordered,
That Mr. John Golding be discharged from the Employment Committee.—[Mr. Philip Holland, on behalf of the Committee of Selection.]

Orders of the Day — North-East Kent (Enterprise Zone)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

Mr. Jonathan Aitken: The purpose of the Adjournment debate is to commend to the Government one or two new initiatives and new ideas designed to improve the employment and economic situation in Thanet and north-east Kent. Perhaps I should explain that in our area we sometimes get mildly irritated by officialdom's tendency to classify us as part of the prosperous south-east. The reality is that we are something of a Cinderella corner of England in which there are coastal towns and villages whose unemployment rates are among the highest in the kingdom. If my hon. Friend the Member for Canterbury (Mr. Crouch) and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) succeed in catching your eye, Mr. Deputy Speaker, they may give precise figures for their constituencies.
For my part, I simply place on record the bleak statistic that in the Ramsgate and Broadstairs travel-to-work area the overall unemployment rate is well above the national average at 15·8 per cent. and for adult males it is 19·8 per cent. Although there are flickering signs of hope for job seekers, such as a slight pick-up this year in the number of advertised vacancies, and encouraging developments among companies specialising in the new electronic technologies such as Racal in my constituency, nevertheless only the most sanguine of optimists could suggest that there are in reality good prospects for a substantial reduction in the unemployment rate in the foreseeable future.
That is why the time may be ripe to explore the possibility of new initiatives. My first proposal for stimulating economic activity in Thanet and north-east Kent is that the Government should consider establishing an enterprise zone in the area. The whole idea of enterprise zones was the brainchild of my right hon. and learned Friend the Chancellor of the Exchequer and it is one of the success stories of the Government. A number of enterprise zones have been established in various parts of Britain, with beneficial results for jobs, factories, new small businesses and economic activity generally.
Some enterprise zones are now in the process of being made operational, among them one in north-west Kent, an area where the problems and opportunities differ little from those in north-east Kent. In view of the lifelong industrial experience of my hon. Friend the Member for Canterbury, I shall leave it to him to develop the case for an enterprise zone in our area. Suffice it to say that I wholeheartedly support the idea and his specific suggestions.
I shall concentrate on my second proposal for stimulating employment in Thanet, which is that Ramsgate should be designated as a free port. That is not a way out idea or pipe-dream. As my hon. Friend the Minister knows, a plan for introducing the concept of free ports into Britain is now under active consideration by Ministers at the Treasury and the Department of Trade. In general terms, it is not appropriate in this short debate for me to rehearse all the broad arguments in favour of free ports, except to say that it is astonishing that we in Britain


have waited so long before even thinking about introducing that concept, which has been so successful in other parts of the world, into our own country.
However, in specific terms, I will argue that Ramsgate would be an ideal location for one of Britain's first free ports. Already it is one of the cross-Channel gateways to Europe. Ramsgate has a large underutilised harbour, a large underutilised airport at Manston and a modern hoverport, which, unfortunately, since last year's merger between HoverLloyd and Seaspeed, has fallen into near disuse. All those sites have land, buildings and facilities with plenty of spare capacity and far too much empty space.
However, if Ramsgate were to become a free port, in no time those facilities would hum, bustle and jump with new commercial activity and new jobs. How would such a transformation come about? As the House knows, a free port, sometimes called a duty-free zone, is created simply by designating an area of land in or around a port into which goods can be imported free of all customs and tariff duties. The area of land is treated for foreign trade purposes as if it were a foreign territory. Imported goods that come into the free port and are then exported to another foreign country leave the free port still without paying customs or tariff duties. If the imported goods leave the free port for a destination in Britain, they are taxed as they leave the free port as if they had arrived straight from a foreign country.
How might that help commerce and employment in Ramsgate? First and foremost, a free port at Ramsgate would become a significant international transit centre for imports. One could be certain that a number of service industries would spring up, such as warehousing, packaging, sorting, freight handling, insurance and shipping. In addition to those flourishing new service industries, all of which would create jobs, the Ramsgate free port would attract manufacturing industry into its boundaries. Given that foreign materials and components come into the free port free of all duties, a manufacturer of finished goods for export would have lower input costs than almost anywhere else in the country.
In that way a free port at Ramsgate could be a magnet for new investment, attracting within its free trade and deregulated boundaries manufacturing industry that might not otherwise have developed at all.
The pattern of free ports all over the world has been to attract service and manufacturing industries into their boundaries. A British free port at the gateway of Europe in Ramsgate is an exciting, yet realistic, vision. Perhaps it would take some time for a Ramsgate free port to pick up at the level of activities in Hong Kong or Dubai, yet I believe that it would work well and succeed, and bring jobs and economic activity to a town that badly needs them. For that reason, I commend my idea to the House.

Mr. W. R. Rees-Davies: I support every word that my hon. Friend the Member for Thanet, East (Mr. Aitken) has said.
The Minister will remember that Thanet was an industrially assisted area for some years. During that time we obtained a considerable quantity of industry. We were then dezoned. In November 1982, therefore, I asked my right hon. Friend the Secretary of State for Industry

whether he would consider reintroducing Thanet to the list of industrially assisted areas. He told me that it was not proposed to do so.
In those circumstances, we feel that an enterprise zone might well fit the case. I understand that enterprise zones offer limited benefits in small areas, and in this case would apply to the free port suggestion put forward by my hon. Friend the Member for Thanet, East, to Margate and to Herne Bay. Those three areas are complimentary to the great city of Canterbury. The benefits include an exemption from rates on industrial and commercial property, and 100 per cent. allowances for corporation and income tax on capital expenditure on industrial and commercial buildings, and would be of immense value, together with the tax relief that investors can receive for small businesses.
I can see no reason why tourism should not receive the benefits that accrue to the manufacturing and industrial areas of the other 12 enterprise zones that have been set up. Therefore, there is no reason why that cannot be achieved. Thanet has severe constraints on land. There is agriculture, and an infrastructure that exists to enable us to create a considerable number of jobs. In Margate, there is an urgent need for a marina. The same is true of Herne Bay and of the port in Ramsgate. There is an urgent need for conference centres in Margate, and in the Kings Hall, Herne Bay. In addition, we must increase caravan sites. A caravan site at Reculver could easily be extended and trees could be planted to ensure development.
Much could be done to improve the beaches, which would in turn lead to rapid expansion. Therefore, special consideration should be given urgently to the promotion of the tourist industry in the Thanet towns and in Herne Bay. It has an immensely important role to play in the future economic development of those towns. The main problem about industrial development in Thanet and Herne Bay is that despite the many unemployed in the area, it has never received proper consideration as an enterprise zone or as an area for special grant. As a result, our locality always competes with the business start-ups in Devon, Cornwall, South Wales and the north of England, which have had the advantage of grants, offering them the facilities for business, enterprise and investment. In the event of the Thanet towns becoming an enterprise zone, assistance could be given both in that way, and from the EEC for the promotion of enterprises. It could al so he given in the form of environmental grants. The European commissioner for tourism, Mr. Contageorgis, told me that with Government policy as it is, no grants could he forthcoming unless the area became an industrially assisted area, or an area receiving special grants. Unemployment in Margate is severe. Male unemployment is running at 27 per cent. Unemployment in the area is, in general, just under 20 per cent. Due to the lack of assistance, the grave problem that we face of trying to modernise has been set at nought.
Any concessions to subsidise the buildings, or to give special rate concessions would rapidly raise the tone and standard of this district, and would enable us—for the first time—to obtain the advantages that have been given to so many areas in the country.

Mr. David Crouch: I am grateful to my hon. Friend the Member for Thanet, East (Mr. Aitken) for letting me complete the Kentish trio of speakers. I shall be brief.
There is a pocket of unemployment in the coastal towns of north-east Kent. Whitstable, Thanet and Herne Bay are typical examples of such pockets of unemployment. The rate of unemployment in Whitstable and Herne Bay, taken together, is now over 20 per cent. In Canterbury, it is about 12 per cent., which is the rate for the whole of Kent.
The pockets of unemployment are not a new problem in north-east Kent. We have had the problem for many years. Tourism has declined and nothing has taken its place. In my constituency there is an industrial estate between the two towns of Whitstable and Herne Bay, and another at Swalecliffe. But they are tiny. There are few jobs to be found there—about 150 vacancies in Whitstable and Herne Bay with about 2,300 people out of work. People must look for work elsewhere. They look to Canterbury, which has 2,600 people out of work with 330 jobs on offer. There is no industry in Canterbury. It is not an industrial town but a cathedral town with retail trading, service industry and tourism. It flourishes on those industries. One other industry is education, which attracts people to work in the great variety of educational opportunities that exist there.
There is not much hope in Thanet, as has been illustrated by my hon. Friend the Member for Thanet, East and my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies). There are nearly 7,500 people out of work with fewer than 200 jobs on offer. Ashford and the Medway towns could be places to seek work, and they are the permitted industrial growth points in Kent. But Ashford has recently seen the closure of its railway workshops, and Chatham is facing the closure of its dockyard. London is the only hope of finding a job, but the price of £1,000 for a rail season ticket is not feasible for the school leaver.
Our constituents are entitled to a better chance in life. We should not drive people away from home to work when they could be working in their own towns. We should aim to produce self-sufficient communities rather than dormitory towns and commuter centres. Canterbury does not need special help. It is self-sufficient with tourism, shopping, entertainment and education. But Whitstable, Herne Bay and Thanet are different—they need special treatment. They lack job opportunities. They are not centres of attraction but problem areas. The Government could put that right at a stroke.
We need to attract industry to those towns. A factory or an office in the country, by the sea, with good labour available, excellent educational resources, good road and rail communications—they could be better, but that is another matter—most of the channel ports and an international airport at Manston. Why have not businesses gone there already? It is because they have been directed to go elsewhere—to Ashford and Medway, the industrial growth points. I want the Government to stop the rot that has set in in north-east Kent and give the towns enterprise zone status. It would be one of small sectors in those areas—not a continuous belt. It would be the blood transfusion that they need. The towns are tailor made for such treatment. They would fit the Act which introduced the great innovation of enterprise zones. They would show

immediate results without surrounding towns being harmed. The other towns would not be affected as they stand on their own feet. I have tried to show that in the case of Canterbury.
I urge my hon. Friend the Minister seriously to study the proposal. If he cannot answer in the affirmative tonight, which we do not expect, I hope that he will take it on board from three hon. Members serving an area that is really worried about its future. Such an initiative would help to revitalise a part of England that has been forgotten for too long.

The Under-Secretary of State for the Environment (Sir George Young): The Government are always glad to receive new ideas or new initiatives, especially from my hon. Friend the Member for Thanet, East (Mr. Aitken), my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) and my hon. Friend the Member for Canterbury (Mr. Crouch). They compose a formidable team to represent the interests of the part of Kent that they serve. There was a salutary reminder that within the southeast there are pockets of relatively high unemployment. I looked at the figures for parts of north-east Kent, and they are much higher than the average for the south-east.
I wish to refer at the end of my reply to the imaginative proposals of my hon. Friend the Member for Thanet, East for a free port at Ramsgate, and I shall deal initially with suggestions for an enterprise zone. Some of the initiatives described by my hon. and learned Friend the Member for Thanet, West would have to be processed, in the first instance, by the district council rather than by my Department. Some of his other suggestions were, I think, directed at the Department of Industry. I am sure that my colleagues in that Department are aware of his views.
I wish now to deal with the concept of the enterprise zone. The idea is to try to bring activity to relatively depressed areas and to achieve this through a judicious mixture of freedoms and incentives. Hon. Members are aware of the tremendous promotional fillip that a zone gives to an area. We have done our best through the local authorities to ensure that progress is not inhibited by bureaucratic delay or lack of foresight. It is perhaps less well known that there has been a high level of activity in many zones since they were announced. It is only just over 18 months since the first zone was established in Swansea and already the successes are there for everyone to see. In the most successful zone, Corby, almost all the land is now taken. Here, as elsewhere, the benefits are being felt well beyond the zone and throughout the town as a whole.
It would be idle to pretend that all the activity in the zones is new firms or that the activity would not have happened without the zones. Some of the jobs are provided by firms which have moved, not because of the zone—it still would not be worth their while financially—but because they had to move anyway to expand and chose to locate in the zones. Even in these cases, especially in older urban areas, we would expect that many of the jobs would have been lost to these areas without the zones. But, in addition, a number of the firms setting up in the zones are new. We know that the small industrialist who wants to build and occupy his own factory is particularly encouraged by the freedoms available to him.
It is, I am sure, evident from what I have said that we have been keeping a close watch on progress in the zones. The response was enormously encouraging. It showed that


we were right to provide this opportunity. We invited more bids and received them from 50 authorities, both Labour-controlled and Conservative-controlled. These bids were of a high quality. We decided, after considering all the cases, that we should increase the number of new zones for England from the seven that we had originally envisaged for the second round to nine. In addition, there were to be two new zones in Scotland and one each in Wales and Northern Ireland.
I come now to the heart of the debate. We received applications, as I am sure hon. Members knows, from authorities in Kent but Thanet district was not among them. We agreed that the two bids—a joint one from Gillingham and Rochester and one from Gravesham—should be combined into a single zone with segments in each authority. We hope that the zone will be promoted and operated jointly. Thanet could not be considered for an enterprise zone because it did not make an application to us. I am sure that my hon. Friends will ensure that their remarks tonight are made known to their local authority so that if the policy of enterprise zones is extended there will be an awareness of the benefits that could accrue to north-east Kent.
The decision on north-west Kent was reached after paying attention to the difficulties facing the economy of the area and the impact from the closure of Chatham dockyard with the consequent loss of 7,000 jobs. We were therefore pleased to grant the area a zone when it not only submitted a bid but, in meetings with us, showed considerable enthusiasm and willingness to work together for the good of the area. I hope that the north-west Kent zone will be a success. I expect it to benefit from its excellent location close to London and to the prosperous part of the south-east.
I wish now to refer to the foreboding that has been expressed about the possible impact on the areas surrounding the enterprise zone. We have had strong and well-argued representations from, for example, Swale which is concerned that the existence of a zone in a neighbouring authority will siphon off all the new activity and sterilise its own developments. Some of those fears have been echoed in speeches in this debate. I sympathise. However, the evidence is that a successful zone stimulates growth well beyond its borders. The industry and commerce attracted to the north-west Kent zone should generate orders for other local firms and services. The parts of north Kent represented by my hon. Friends will undoubtedly benefit from this growth and opportunities will be created for some of those made redundant by the dockyard rundown.
The unemployment figures give cause for concern. The modifications to the first Kent structure plan alteration have now been published. It sets out the strategy for dealing with the problem of unemployment in the area. The alteration sets out policies to encourage growth in manufacturing industry and service industry and in this respect seeks to ensure that a readily available supply of land for industrial and warehousing development is available in the urban areas.
I was also delighted to find that Thanet district council has produced a draft urban plan for consultation. This allocates nearly 19 hectares of land for industry as well as setting out policies to guide decisions on the establishment and expansion of industrial premises together with policies to retain industrial land and premises.
We have given increased priority to roads in the southeast. Between one third and one half of the trunk roads programme is now being spent on projects in the southeast. As my hon. Friends will know, the M25 is being built as a top priority, two sections of the M20 have now been finished and the A2 has been improved. The Government will assume complete responsibility for the A249 from the junction with the M2 to Sheerness once the current improvement scheme is completed and statutory procedures have been implemented.
There is a proposal for a bypass to Iwade on this route in the future and we will be seeking the public's views shortly. Kent has done very well in the past three transport supplementary grant settlements. In 1982–83 the whole of Kent's bid for current and more capital expenditure was accepted for grant. This was far greater than for any other shire county. In the 1983–84 expenditure allocations announced in December, Kent again received the highest amount of accepted expenditure amounting to £41·7 million, attracting a transport supplementary grant of £2·7 million.
We have recently made it clear that we would be looking again at the question of trunking the Thanet way, the A299. In particular, we wish to ensure that we are taking decisions on the very latest information, reflecting the recent developments such as the growth of traffic through Ramsgate port. In addition, just before Christmas discussion took place between shipping interests, Thanet district council and the Department of Transport concerning a proposal to carry out a major £12 million expansion of Ramsgate harbour.
The main thrust of my hon. Friend's remarks was that a free port should be established at Ramsgate. He illustrated the considerable benefit that would result not just to the economy in Ramsgate but to the United Kingdom economy as a whole. As my hon. Friend said, we have recently set up a working group on free ports. The terms of reference make it clear that its task is to examine in principle whether the establishment of free ports would be beneficial to industry and commerce in the United Kingdom.
We decided that the approach must be to look first at the main issues involved. It would therefore be premature to consider claims of individual locations at this stage. But if it is decided to introduce free ports, I can assure my hon. Friends that all bids for such facilities will be carefully considered, including of course the case for Ramsgate. What attracted me about the picture that my hon. Friend painted was that we were talking not of jobs that would be diverted from other parts of the United Kingdom but of the generation of new jobs and the ability to compete or, equal terms with some of the other free ports in the world. I am sure that my hon. Friends at the Department of Trade and at the Treasury who are considering this question will read with interest what my hon. Friend has said and will take into account his representations when they reach a decision on the case for free ports as a whole.
I hope that what I have said in response to the interesting debate provoked by my hon. Friend demonstrates our commitment to north Kent and to Thanet. The enterprise zone about which my hon. Friends have spoken is not the sum total of Government commitment to the area. I have mentioned our other actions, including the substantial investment in road infrastructure. The enterprise zone to the west provides a significant opportunity to the area to diversify its industry


and to provide the jobs it so badly needs. North Kent has a great deal of potential. I hope that the measures I have

mentioned and perhaps some of the measures that have been anticipated by my hon. Friends will help north Kent to realise that potential.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Two o'clock.